Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Finance Minister Amir Khosru Mahmud Chowdhury has said that the upcoming national budget will prioritise building a sustainable, transparent and inclusive economy in a shift from growth bias of yesteryear.
Elaborating on the economic-financial blueprint, he says the government aims to stimulate a cycle of investment, production, employment and consumption to deliver sustained and inclusive growth over the coming decade.
Delivering a statement Friday in parliament under Rule 300, the finance minister noted that the 2026-27 budget is being prepared amid multiple economic pressures, including inflation and external imbalances.
"We are fully aware of the high expectations surrounding the first budget of the newly elected government," he said, urging the public to consider the constraints inherited from previous administrations.
Khosru, who also holds planning portfolio, told the lawmakers Dhaka was seeking additional budgetary support from development partners to ease pressure on Bangladesh's balance of payments and foreign-exchange reserves, while attempting to restore discipline across key sectors of the economy.
A central pillar of the reform agenda is to improve governance in the financial sector. The government plans to overhaul the legal framework of the central bank and strengthen oversight of commercial banks, amid concerns over capital shortages and weak management.
It also aims to reduce reliance on borrowing by increasing revenue-based financing for development projects and deepening the domestic bond market.
Chowdhury said fiscal policy would be guided by medium-term budgetary and macroeconomic frameworks, supported by a "dynamic macro-fiscal model" to help steer Bangladesh towards becoming a trillion-dollar economy by 2034. The strategy to get to the goal includes aligning borrowing with risk management and gradually lowering the debt-to-GDP ratio.
He outlines a five-point programme underpinning the government's economic agenda: (1) bringing inflation down to 5-6 per cent to ease pressure on household living costs (2) casting wider the tax net, modernising tax administration and raising the revenue-to-GDP ratio to 15 per cent to reduce dependence on debt (3) working with international agencies to trace and repatriate laundered money (4) support to small and medium enterprises through easier access to credit and business-friendly policies to drive growth and employment (5) increasing spending on health, education and human development, alongside more efficient and targeted welfare programmes under social-protection recipe.
The minister also signalled a strategic shift in capital formation, placing greater emphasis on the capital market over bank-led financing.
Planned measures include granting greater independence to regulators, crackdown on market manipulation, and investigating irregularities in the sector over the past 15 years.
New instruments such as corporate bonds, sukuk and green bonds are expected to diversify the financial market and help restore investor confidence. Finance Minister Khosru states that the country's economy has been pushed to the brink of collapse through rampant corruption and unchecked looting over the past 16 years under the "fascist government".
He also notes that the social and institutional sectors have become largely ineffective.
In his statement, the finance minister says, "A brief overview is being presented to explain the economic context in which the current government has assumed responsibility and the direction of the future journey.
The Bangladesh Nationalist Party (BNP) has taken charge of governing the country after securing an absolute majority through a free and fair election. As elected representatives of the people, the party believes in transparency and accountability and is committed to working with the people to advance national development.
From this sense of responsibility, we are presenting before the nation a picture of key macroeconomic indicators and institutional conditions covering the fiscal year 2005-06, the final fiscal year (2023-24) of the previous Awami League government, and the interim government's fiscal year 2024-25."
The finance minister further stated that widespread corruption and massive looting during the past 16 years brought the economy on the verge of collapse and rendered social and institutional sectors dysfunctional.
Although the size of the economy has grown, he says several structural weaknesses have gradually become more evident-and he draws a comparative picture of the situation on the economic front obtained over the years.
In the fiscal year 2005-06, GDP growth at constant prices stood at 6.78 per cent, with inflation at 7.17 percent. However, due to misguided policies, by the end of fiscal year 2023-24, growth had declined to 4.22 percent, while inflation heated up to 9.73 percent.
Industrial growth fell sharply from 10.66 percent to 3.51 percent, and agricultural growth declined from 5.77 percent to 3.30 percent.
Due to insufficient job creation in the industrial and services sectors, young people are being forced into agriculture, intensifying "disguised unemployment" and limiting their productivity and income potential.
Currently, the agricultural sector accounts for 41 percent of total employment but contributes only 11.6 percent to national value added-an indication of low labour productivity and the risk of "jobless growth".
The balance between savings and investment has also deteriorated. National savings declined from 29.94 percent in 2005-06 to 28.42 percent in 2023-24. Meanwhile, the taka's exchange rate has depreciated significantly-from Tk 67.2 per US dollar in 2005-06 to Tk 121 in 2024-25. And the currency devaluation raised import costs and the overall cost of living.
Highlighting further concerns, the finance minister notes that growth in money supply and reserve money has declined sharply.
Private-sector credit growth has fallen from 18.3 percent to 6.5 percent in 2024-25, reflecting liquidity constraints in the banking sector and sluggish investment. "Revenue collection has failed to meet expectations, and due to tax evasion and waste, government's resource-mobilisation capacity has remained limited."
The budget deficit has increased from 2.9 per cent in 2005-06 to 4.05 percent.
He also alleges that megaprojects implemented during the previous government were "overvalued and executed without proper feasibility assessments, depriving the people of expected benefits, while vast sums of money were siphoned abroad through corruption".
mirmostafiz@yahoo.com