Bangladesh’s interim government is set to unveil its first national budget for the 2025–26 fiscal year on Monday (June 2), amounting to Tk 7.9 trillion (Tk 790,000 crore).
The announcement comes as the country navigates economic headwinds and a shifting political landscape following last year’s upheaval.
Notably, the proposed budget is Tk 70 billion smaller than the current fiscal year’s Tk 7.97 trillion outlay—marking the first time since independence that a national budget is smaller than its predecessor.
Officials from the Finance Ministry attribute this to a move toward tighter fiscal discipline amid constrained resources, with the aim of curbing inflation and restoring macroeconomic stability.
The 2025–26 budget is expected to prioritize rural employment and infrastructure, including increased allocations for road construction and maintenance.
Social safety net programs, particularly in rural areas, will see both an expansion in the number of beneficiaries and increases in allowances.
This will be the first budget presented by the appointed interim administration, led by Chief Adviser Professor Muhammad Yunus.
Finance Adviser Dr Salehuddin Ahmed will deliver the budget in a pre-recorded speech scheduled for broadcast at 4 PM on Bangladesh Television (BTV) and Bangladesh Betar.
All private television and radio stations have been requested to air the address simultaneously using the BTV feed.
In a departure from tradition, the Finance Ministry will seek public feedback on the proposed budget following its broadcast.
Based on the responses, a final version will be submitted for approval at an Advisory Council meeting chaired by Professor Yunus.
Once approved, the budget will be implemented via a presidential ordinance from July 1.
The last time a national budget was delivered outside Parliament was in 2008, when then-Economic Adviser A B Mirza Azizul Islam announced a Tk 999.62 billion budget under a caretaker government—also broadcast on BTV and Betar.
During the Awami League’s 15-and-a-half-year rule, finance ministers Abul Maal Abdul Muhith, A H M Mustafa Kamal, and Abul Hasan Mahmood Ali presented budgets in Parliament, where they were debated and passed by the end of June.
Budget Highlights
The projected budget deficit for FY26 stands at Tk 2.26 trillion—down from Tk 2,560 billion in the current fiscal year—representing 3.62% of GDP.
The shortfall is expected to be financed through a combination of foreign aid, domestic bank borrowing, and the sale of savings certificates.
The government has set a GDP growth target of 5.5% for FY26, slightly above the revised 5.25% for FY25.
However, international financial institutions such as the World Bank, IMF, and Asian Development Bank have expressed caution, projecting growth below 5% due to persistent structural weaknesses and inflationary pressures.
Curbing inflation remains a central goal, with the government aiming to reduce it to 7%.
Economists, however, caution that global uncertainties and entrenched domestic price pressures may impede progress toward that target.
To mitigate the impact of inflation on low-income groups, the budget will significantly expand social safety net programs and rural employment initiatives.
Investments in local infrastructure and essential services are also expected to feature prominently.
Key sectors set to receive priority funding include agriculture, healthcare, education, and technology.
The Annual Development Programme (ADP) is pegged at Tk 2,300 billion, a reduction from Tk 2,650 billion in FY25, indicating a more focused approach to public investment.
The revenue collection target has been raised to Tk 5,180 billion, up from Tk 4,800 billion.
However, under its ongoing reform program, the IMF has recommended a more ambitious target of Tk 5,800 billion.
Non-development expenditure is projected to rise to Tk 5,600 billion, with significant allocations for debt servicing, food subsidies, and banking sector reforms.
A special provision is expected to address capital shortfalls in state-owned banks.
Subsidies for agriculture, fertilizer, and electricity will continue to support rural livelihoods and key industries.
Mixed Public Sentiment
Public sentiment ahead of the announcement is mixed.
While many welcome the planned expansion of social programs and inflation control measures, skepticism remains over the interim government’s ability to execute the budget effectively.
Economists argue that long-term success will depend on deeper structural reforms, improved tax enforcement, and a shift toward progressive direct taxation to reduce reliance on regressive indirect taxes.
As Bangladesh prepares for a crucial budget presentation during a period of political transition, both domestic stakeholders and international observers will be closely watching the June 2 address to assess the country’s economic direction and stability.