The government is on track to surpass the Tk 9,00,000 crore mark for the budget of the 2026-27 fiscal year. This increase is driven by a commitment to fulfill electoral promises, partially implement salary recommendations for employees, and protect the economy from the ongoing conflict in the Middle East.
A high-level meeting chaired by Finance Minister Amir Khosru Mahmud Chowdhury is set to finalize the preliminary framework for the upcoming budget.
The original budget for the current 2025-26 fiscal year was Tk 790,000 crore but was later revised down to Tk 788,000 crore, with cuts in development spending and increased allocations for subsidies and non-development expenses.
The proposed expansion for the next fiscal year stands at Tk 920,000 crore, one of the largest increases in recent history. A senior official from the finance ministry emphasized the significance of this budget as it sets the administration’s priorities and lays the financial groundwork for fulfilling five-year commitments.
The planned expansion is primarily due to increased spending on public sector salaries, subsidies, and social protection, as well as the need to shield the economy from external shocks stemming from the US-Israel conflict with Iran.
While the revenue collection is expected to fall short of its target, the government may raise the revenue collection target for the next fiscal year to Tk 650,000 crore. The deficit for the upcoming fiscal year is projected to be around 5 percent of GDP.
The government aims to maintain a GDP growth target of 6.5 percent and lower inflation to 7 percent in the next fiscal year. It anticipates a gradual recovery in both public and private investments under the newly elected government.
Various electoral commitments, including the Family Card program costing Tk 13,000 crore for 40 lakh families in its first year, will require substantial funding. The implementation of the Ninth Pay Commission’s recommendations is estimated to necessitate an additional Tk 106,000 crore annually.
To manage rising demands, the government plans to consolidate existing social safety net schemes. The revised budget earmarked Tk 88,000 crore for subsidies, but ministries are seeking additional allocations post the US-Israel conflict, potentially pushing subsidy spending beyond Tk 100,000 crore.
A committee has been formed to review the Annual Development Programme, with a focus on scrapping previous projects and introducing new ones aligned with the ruling party’s manifesto. The ADP size is expected to be set at approximately Tk 300,000 crore.
Experts emphasize the urgency of revenue-boosting initiatives, including tax system modernization, digitalization expansion, and curbing tax evasion. They suggest reprioritizing spending, caution in approving new projects, and keeping the budget deficit within 4 to 5 percent to avoid unsustainable debt pressure.
