The proposal to release the third and fourth tranches of the International Monetary Fund’s $4.7 billion loan is set to be presented to the multilateral lender’s board on June 23 after the government fulfilled all prior conditions.
The finance ministry has identified seven major challenges including tight monetary and fiscal policies, taken to tame elevated inflation levels for more than three years, in next fiscal year that may increase unemployment.
The government expects the country’s economy to cross the $500 billion mark in the fiscal year (FY) 2026-27, buoyed by stabilising policies and sectoral improvements.
The interim government proposed a new framework for social safety net programmes, under which 7.68 crore poor people would receive Tk 37,076 crore next fiscal year to help them cushion the blow from high inflation over the last three years.
The government’s target to provide subsidies and incentives amounting to Tk 125,741 crore in fiscal year 2025-26 is creating high pressure on fund mobilisation amid a challenging macroeconomic situation.
Govt puts inflation control, revenue reform, fiscal restraint at the heart of its economic plan
Budgetary spending increased by 17.5 percent year-on-year in the first nine-month period of the current fiscal year of 2024-25, mainly due to a rise in spending on interest payments and subsidies.
Bangladesh’s gross domestic product is projected to surpass the $500 billion mark for the first time in the upcoming fiscal year contingent upon exchange rate stability.
As much as Tk 122,000 crore is expected to be allocated for interest payment in the budget for the upcoming fiscal year, which is about 22 percent of the total revenue budget.
The interim government expects the country’s gross foreign exchange reserves to rise to $34.4 billion by the end of the fiscal year (FY) 2025–26, buoyed by strong remittance inflows, export performance, and budgetary support from development partners.
The budget for fiscal 2025-26 is likely to be smaller than the current year’s outlay, but subsidy spending is expected to remain almost unchanged at Tk 1,15,741 crore.
The interim government is likely to introduce a transparent system for social safety net schemes in the upcoming budget, increasing the number of beneficiaries by around 10 lakh while slashing one-third of the existing programmes.
The government plans to raise the food subsidy allocation by 31 percent to Tk 9,500 crore in the upcoming fiscal year, aiming to ensure access to affordable food for poor and low-income households.
The interim government plans to reduce the national budget deficit to 3.6 percent of gross domestic product in the upcoming fiscal year -- the lowest in 14 years -- as it seeks to rebuild fiscal credibility, limit borrowing, and ease pressure from rising debt servicing costs.
Finance Adviser Salehuddin Ahmed speaks to The Daily Star
For the first time, the planning ministry has used a digital budget planning system to categorise spending based on economic codes
The railway ministry, the power division, and the primary and mass education ministry will see the biggest chop.
Interest payments and subsidies have absorbed nearly half of Bangladesh’s total budget expenditure in the first seven months of the current fiscal year, underscoring growing fiscal stress and raising concerns over public finances.
