Bangladesh’s budget deficit in FY24 could be at risk: Fitch Ratings

Bangladesh's budget deficit forecasted by the government for the next fiscal year could be at risk if the growth undershoots the authorities' relatively optimistic target, said Fitch Ratings.

Bangladesh's fiscal outcomes have often diverged significantly from budget forecasts, with persistent underspending against targets, the US-based credit rating agency said in a report published yesterday.

It said revised figures for FY23 point to a budget deficit target equivalent to 5.1 per cent of GDP, compared with an original target of 5.5 per cent and Fitch's most recent projection of 5.7 per cent.

"This reflected weaker-than-expected spending on development, but also outperformance on revenue collection," it said.

These effects more than offset the impact of additional subsidy spending, which rose to 2.2 per cent of GDP against the original budget target of 1.8 per cent amid high global prices for fertiliser, fuel and natural gas, it added.