Inflation control should be key priority in next budget: Debapriya

Inflation control should be the central focus of Bangladesh’s 2026–27 national budget, said Centre for Policy Dialogue (CPD) Distinguished Fellow Debapriya Bhattacharya, calling it the “guiding star” for macroeconomic stability.

Speaking at a roundtable titled “Budget in Crisis and Public Expectations” held at the Pan Pacific Sonargaon Hotel in Dhaka Thursday (may 21), he said budget formulation has become a difficult balancing exercise amid structural weaknesses, global economic pressures, conditionalities from international lenders, and rising public expectations.

Bhattacharya stressed that alongside price stability, fiscal discipline must be maintained, recommending that the budget deficit should not exceed 4 per cent of GDP under any circumstances.

On revenue mobilisation, he emphasised raising the tax-to-GDP ratio and improving efficiency in tax administration. He also cautioned against cuts in education and health allocations, calling them critical for long-term development.

The economist urged a reassessment of tax exemptions and subsidies, noting that large-scale concessions in certain sectors are creating pressure on the economy.

He also advocated the introduction of wealth tax and inheritance tax, arguing that such measures are necessary to reduce inequality alongside income taxation reforms.

Expressing concern over debt sustainability, Bhattacharya said Bangladesh is now facing a moderate level of debt risk, with rising external repayment pressures posing a major challenge for budget management.