The newly elected Bangladesh Nationalist Party-led government is planning to expand public expenditure in the next financial year by taking more loans from the local and external sources against the backdrop of the revenue collection shortfall.
Finance ministry officials said that it was imperative for the BNP-led government to place an expansionary national budget to implement election pledges like the introduction of family card, farmer card and health card.
The overall projected costs for the cards are about Tk 50,000 crore in the 2026-27 financial year which will begin on July 1.
The government is also under pressure to implement the new pay scale for the government officials and employees partly, which will require about Tk 25,000 crore.
Besides, more allocations on energy items and fertiliser will be required to absorb price shocks of energy items and fertiliser due to the war in the Gulf destabilising maritime trade through the Strait of Hormuz.
With hundreds of ships stranded in the Gulf because of the closure of the Strait by the Iranian authorities after the United States and Israel attacked Iran on February 28, peace talks among the warring parties began in Pakistan’s capital Islamabad on Saturday amid a two-week truce.
Finance ministry officials said that more time would need to normalise the situation, especially the maritime trade through the Strait, accounting for 20 per cent supply of the global fuel oils.
Bangladesh is already feeling pinches from the supply disruption, evident from a huge rush for fuel oil by consumers at the filling stations amid the supply shortage and hoarding.
Finance ministry officials said the less-than-expected revenue collection would force the government to obtain loans worth about Tk 3 lakh crore from the local and foreign sources to meet the next national budget deficit of about 5 per cent of the gross domestic product.
In the current financial year, the projected budget deficit of 3.5 per cent of the GDP of Tk 62,44,578 crore was set by the interim government, the tenure of which ended in March following the February 12 national election.
Besides, the FY26 national budget of Tk 7.9 lakh crore has been aimed at prioritising economic recovery over high growth as it is roughly 1 per cent smaller than the original budget for the FY25.
Of the overall loans, the government is looking to ensure more than Tk 1.2 lakh crore from the foreign sources and the rest — about Tk 1.6 lakh crore — from the local sources.
On April 10, a meeting of the coordination council on budget and macro-economy outlined the provisional targets for the forthcoming financial year, aiming at the overall outlay of over Tk 9 lakh crore for achieving 6.5 per cent GDP growth.
Presided over by finance and planning minister Amir Khasru Mahmud Chowdhury, the online meeting also set the inflation target at 7 per cent.
The country has been grappling with high inflation over recent years, with the rate hitting the double digit in 2023. In March 2026, the point-to-point general inflation eased slightly to 8.71 per cent from 9.13 per cent in February, according to Bangladesh Bureau of Statistics data.
On April 9, an update by the General Economics Division of the planning ministry highlighted mounting challenges from energy crisis and persistent inflation, despite some improvement in foreign exchange reserves.
The report warned that the ongoing energy crisis was affecting fiscal balances, external accounts and investment activities.
Amir Khasru, who is expected to place the new national budget in parliament on June 11, is likely to project the revenue income at Tk 6.5 lakh crore. The size of the FY27 annual development programme is likely to be over Tk 3 lakh crore.
For the FY26 budget, the revenue target has been set at Tk 5.64 lakh crore and the revised ADP at Tk 2 lakh crore. The National Board of Revenue has been missing the tax collection targets over the years.
