Budget for FY 2025-26 may reach Tk 8.5 lakh crore

The budget for the fiscal year 2025-26 is expected to be around 8.5 trillion taka. The government aims to bring down inflation to 7% in the upcoming fiscal year, while policymakers are content with setting a GDP growth target of 5.5%. With these objectives in mind, the Ministry of Finance has already started preparing the new budget. Economists emphasize that the budget should not be politically ambitious like in previous years but rather focus on investment and employment generation.

Despite various interim government measures to reform the financial sector, inflation remains uncontrolled. The government had set a target to reduce inflation to 6.5% in the current fiscal year, but even after six months, it remains close to 11%.

Although this year’s budget was cautiously designed with a 6.8% GDP growth target, the International Monetary Fund (IMF) has projected a lower growth rate of 4.5%, as per its October 2024 report.

In the Annual Development Program (ADP), 2.65 trillion taka was allocated, but in the first six months, only 400 billion taka has been spent. Similarly, out of the 4.8 trillion taka revenue target, the National Board of Revenue (NBR) has managed to collect 1.59 trillion taka in the first five months (until November). To boost revenue, the government increased VAT and tariffs on over 100 products and services on January 9. Meanwhile, work is ongoing to finalize the new budget.

According to the Ministry of Finance, the upcoming budget is expected to be 8.5 trillion taka, with a 7% inflation target and a 5.5% GDP growth projection. However, economists stress that the budget should not be conventionally political or overly ambitious.

Economist Dr. Abu Yusuf stated that "It is being speculated that the budget could be 8.5 trillion taka. If this happens, the government will continue with an incremental budget approach. That means the current budget structure will remain unchanged, making significant reforms difficult."