Budget for FY2025-26 passed

The interim government has approved the Tk789,999 crore national budget for 2025-26 fiscal year.

The budget was approved at a special meeting of the Advisory Council at the Chief Adviser’s office in Tejgaon, Dhaka, on Monday (June 2) afternoon with the Chief Adviser to the interim government Professor Dr Muhammad Yunus in the chair.

With no functioning parliament existing following the July-August changeover, Finance Adviser Salehuddin Ahmed will deliver the budget speech in a pre-recorded broadcast scheduled for 3pm on Bangladesh Television (BTV) and Bangladesh Betar.

Private television channels and radio stations have been requested to air the speech simultaneously, using BTV’s official feed.

This will be the first budget to be presented by the newly installed appointed administration, which faces the daunting task of curbing persistent inflation, reinvigorating private investment and strengthening social safety nets amid global and domestic uncertainties.

In contrast to previous years, the proposed budget is Tk7000 crore lower than the current fiscal year’s allocation of Tk797,000 crore.

According to finance ministry officials, this reduction aligns with a strategy for fiscal consolidation, ensuring a more implementable and efficient financial plan.

The projected budget deficit stands at Tk226,000, down from Tk256,000 in the current fiscal year, representing 3.62% of the GDP.

To bridge this gap, the government will depend on foreign borrowing, bank loans, and savings certificates.

An ambitious GDP growth target of 5.5% has been set for FY26, slightly higher than the revised 5.25% for the current year. But, international financial institutions, including the World Bank, IMF and ADB, predict growth will remain below 5%.

Key sectors prioritised for funding include agriculture, health, education and technology.

The Annual Development Programme (ADP) allocation is projected at Tk230,000 crore, a reduction from Tk265,000 crore in the current fiscal year, signifying a more focused investment approach.

The revenue collection target for FY26 is set at Tk518,000 crore, up from Tk480,000 crore in the current fiscal year. But, the IMF has recommended a more aggressive target of Tk580,000 under its reform agenda.

Non-development expenditures will rise, with major allocations earmarked for debt servicing, food subsidies, and banking sector reforms.

The non-development budget is expected to reach Tk560,000 crore, an increase of Tk28,000 crore compared to the current fiscal year’s allocation.

The government also plans to strengthen the banking sector with a dedicated allocation to cover the capital shortfall of state-owned banks. Besides, subsidies for agriculture, fertilisers, and electricity will continue to support key industries.