Staff Correspondent:

The authorities have identified the establishment of good governance in every sector as a priority in the upcoming national budget for the 2025-26 fiscal year, according to the finance ministry sources.

Alongside reducing inequality, the budget will also aim to ease the burden of inflation on low-income groups by expanding both the number of beneficiaries and, in some cases, the allowance amounts under social safety net programs.

Additionally, agriculture, health, education, and technology will be treated as priority sectors.

The government intends to address disparities across food, housing, the economy, healthcare, education, and society — working toward an equitable, balanced development model.

Reforms, inflation control, and boosting investment and employment will rank as the second-highest priorities.

BUDGET SIZE LIKELY TO BE REDUCED TO TK7,90,000 CRORE

Officials involved in the process said the government is preparing a budget of Tk7,90,000 crore for the 2025-26 fiscal year, which is Tk7,000 crore smaller than the Tk7,97,000 crore allocated for the current year.

The projected budget deficit is likely to be Tk2,26,000 crore, down from this year’s Tk2,56,000 crore.

More than half of the deficit will be financed through foreign borrowing, with the remainder to be sourced from bank loans and savings certificates.

Despite the smaller budget size, non-development expenditure is set to increase. Sources indicate that the government plans to allocate Tk5,45,000 crore, up from Tk5,06,900 crore in the current budget.

GOVERNMENT SETS 7% INFLATION TARGET, GDP GROWTH AT 5.5%

The government plans to set the inflation target at 7%, despite ongoing inflationary pressures, and the GDP growth target at 5.5%. The original target for the current fiscal year was 6.5%, but it was revised down to 5.25% last month.

International institutions, including the World Bank, the IMF, and the ADB, have predicted that Bangladesh may struggle to even achieve 5% growth.

The upcoming budget is expected to set the GDP size at Tk63,15,000 crore, while the budget deficit will likely be capped at 3.62% of GDP.

FINANCE ADVISOR SET TO ANNOUNCE BUDGET ON JUNE 2

For the first time since independence, the budget will not be placed in parliament, as the country currently has no elected government.

Instead, Finance Adviser Dr Salehuddin Ahmed is expected to announce the budget on television on June 2.

REVENUE COLLECTION TARGET

The government is aiming to collect Tk5,18,000 crore in revenue through the National Board of Revenue (NBR) in the 2025-26 fiscal year, up from this year’s target of Tk4,80,000 crore. However, the International Monetary Fund (IMF) has recommended a more ambitious target of Tk5,80,000 crore as part of its reform program.

The allocation for the Annual Development Programme (ADP) is also expected to shrink from Tk2,65,000 crore in the current budget to Tk2,30,000 crore in the next fiscal year.

KEY SECTORS TO RECEIVE PRIORITY

The new ADP guidelines highlight priority funding for projects in agriculture, agro-based industries, education, healthcare, power generation, disaster management, and climate resilience. Special emphasis will also be placed on green and climate-related projects.

The budget is also likely to expand the social safety net to mitigate the impact of inflation on low-income groups by increasing both the number of beneficiaries and the value of allowances.

According to finance ministry sources, allocations for these projects will be finalized based on recommendations from relevant ministries, which have also been asked to include future funding projections for fiscal years 2026-27 and 2027-28.

GOVERNMENT UNLIKELY TO EXPAND BUDGET SIZE

A senior finance ministry official, speaking on condition of anonymity, said the government is facing revenue shortfalls while grappling with growing expenditure pressures, leaving little scope to expand the budget.

To keep inflation in check, the government had to reduce tariffs on essential imports during the current fiscal year, which has widened the budget gap and forced the introduction of VAT on over 100 new items.

This year, the government is planning to tighten spending to ensure a more realistic and implementable budget. The aim is to finalize the budget before the Eid-ul-Azha holiday, which is why the announcement date has been set for Monday, June 2 — diverging from the usual practice of unveiling the budget on a Thursday.

Dr Zahid Hussain, former World Bank lead economist for Dhaka, said the budget should be “achievable and grounded in reality,” adding that, given the current economic climate, a smaller budget would be the more prudent choice.

Finance Adviser Dr Salehuddin Ahmed has also stressed that the 2025-26 budget will be both “realistic and implementable,” with a clear roadmap for reducing social inequality and strengthening good governance across all sectors.