The American business community in Bangladesh has welcomed the government’s proposed budget for the 2026-27 fiscal year, describing it as a balanced attempt to stabilise the economy while supporting long-term growth, but cautioned that ambitious revenue targets and rising domestic borrowing could pose risks to the private sector.
The American Chamber of Commerce in Bangladesh (AmCham) said the Tk938,000 crore ($76 billion) budget reflected a pragmatic response to both domestic and global economic challenges, combining fiscal discipline with increased spending on social protection, education and healthcare.
The government has set targets of 6.5 per cent economic growth and 7.5 per cent inflation for the coming fiscal year, as policymakers seek to accelerate recovery from slowing growth and persistent price pressures.
In a statement released on Thursday, AmCham said it welcomed the government’s efforts to maintain macroeconomic stability while promoting investment and supporting vulnerable populations.
“The budget provides a strong foundation for economic resilience and growth,” the chamber said, while stressing that successful implementation would be critical to achieving its objectives.
A key concern for the business group is the government’s planned fiscal deficit of 3.55 per cent of gross domestic product. Although describing the deficit as broadly prudent, AmCham warned that financing a significant portion of the shortfall through domestic borrowing could limit credit availability for businesses and increase borrowing costs across the economy.
The chamber said close coordination between fiscal and monetary authorities would be necessary to prevent crowding out private sector investment and to maintain economic stability.
AmCham also highlighted the challenge of achieving the government’s revenue collection target of Tk6.95 lakh crore, one of the most ambitious in Bangladesh’s recent history. The organisation argued that meeting the target would require far-reaching reforms in tax administration, greater transparency and wider adoption of digital systems.
While welcoming ongoing efforts to modernise tax collection and improve compliance, the chamber called for further institutional reforms, including consideration of separating tax policy formulation from tax administration to improve governance and efficiency.
The business group praised increased public spending on education, healthcare and social protection programmes, including an allocation of Tk1.45 lakh crore for social safety initiatives. However, it noted that higher spending alone would not guarantee better outcomes without parallel improvements in governance, accountability and service delivery.
The expansion of the government’s Annual Development Programme to Tk3 lakh crore was also viewed positively, particularly for its potential to improve infrastructure and connectivity. Nevertheless, AmCham warned that persistent implementation weaknesses, including project delays and cost overruns, continue to undermine the effectiveness of public investment.
The chamber welcomed several trade-related measures designed to support exporters and improve competitiveness, including reductions in selected import and export taxes. As Bangladesh prepares to graduate from Least Developed Country status, AmCham said structural reforms and greater policy predictability would be essential to maintaining export growth and attracting foreign investment.
On energy policy, the organisation expressed support for incentives promoting renewable energy, electric vehicles and sustainable development. However, it stressed that Bangladesh must continue investing in domestic energy resources and infrastructure to ensure reliable and affordable power supplies for industry.
While broadly endorsing the budget’s direction, AmCham concluded that policy consistency, effective execution and stronger collaboration between government and the private sector would determine whether the budget succeeds in delivering its growth ambitions.