As the new government prepares to unveil its first national budget, it faces a delicate balancing act. On the one hand, there is a natural expectation that the pledges made during the election campaign will be reflected in the fiscal plan. On the other, the realities of available resources and the broader state of the country's macroeconomy demand restraint and careful judgment. In this context, policy experts have urged the government to adopt a realistic fiscal framework for the upcoming budget. Ambitious targets, while politically appealing, could aggravate existing macroeconomic pressures at a time when both geopolitical tensions and domestic economic challenges are weighing on the economy.
This caution stems from the fact that the country's economy is currently navigating a complex mix of internal and external pressures. Managing these pressures requires thoughtful and strategic policy responses rather than overly optimistic projections. At the same time, the government's first budget offers a valuable opportunity to signal its approach to fiscal management and policy direction. With this in mind, economists have recommended that the finance authorities set achievable revenue projections in the 2026-27 budget and introduce measures aimed at strengthening fiscal management and advancing structural reforms. The broad priorities, they suggest, should be maintaining macroeconomic stability, encouraging investment, protecting vulnerable groups and creating employment opportunities.
These recommendations were recently highlighted at a media briefing by the Centre for Policy Dialogue (CPD). According to its executive director, the government should avoid setting overly ambitious targets and instead concentrate on realistic revenue projections and stronger fiscal governance. Structural reforms, particularly those that improve the efficiency of public finance, should also be an important part of the budget framework. The CPD also drew attention to the uncertainties in the global environment. Rising geopolitical tensions, especially conflicts involving major powers and the Middle East, have the potential to disrupt global energy markets. In case of an import-dependent economy like Bangladesh, any instability in global supply chains could intensify domestic inflationary pressures and further strain the balance of payments. These realities underscore the importance of a cautious and well-calibrated budget.
Domestically, the economy has been going through a difficult period since the political transition. What is urgently needed now is stability in the overall macroeconomic environment. The upcoming budget should therefore focus on creating the conditions that allow economic potential to be harnessed more effectively. One area that demands particular attention is revenue mobilisation. For years, Bangladesh has struggled with a low tax-to-GDP ratio, which continues to constrain public spending capacity. The revenue shortfall in the current fiscal year has already reached around Tk 600 billion, placing significant pressure on government finances. These features highlight the urgent need for comprehensive reforms in the revenue collection system. Strengthening tax administration, broadening the tax base and improving compliance will be essential steps towards building a more sustainable fiscal foundation. Ultimately, a realistic budget — grounded in prudent projections and supported by meaningful reforms — may offer the most reliable path towards economic stability and renewed public confidence.
