REJAUL KARIM BYRON

The BNP-led government, which swept into power with a two-thirds majority in February, is set to unveil the country’s largest budget yet, hinging on an ambitious revenue target and a bold plan to draw on foreign assistance.

Tomorrow, Finance Minister Amir Khosru Mahmud Chowdhury will deliver his first budget, whose theme will be “Economic democratisation and decentralisation, Bangladesh in the trillion-dollar economic march”. The budget will cross the Tk 9 lakh crore mark for the first time in history.

Although the finance minister has not mentioned specific figures in budget discussions, he has said the upcoming budget will be quite large to support economic recovery.

Broadly, three main objectives will be set: reviving the economy, implementation of the government’s electoral pledges and turning towards a high growth trajectory to expand employment.

For three consecutive years, GDP growth has been on a downward trend.

In the last fiscal year, growth fell below 4 percent, the first time since the global coronavirus pandemic in fiscal 2019–20.

Development partners have forecast that growth will remain below 4 percent this fiscal year as well. Meanwhile, since 2023, inflation has stayed above 9 percent.

In the upcoming fiscal year, the GDP growth target is expected to be 6.5 percent growth and the inflation target 7.5 percent.

To achieve this, the revenue target will be set at Tk 695,000 crore, 90 percent of which will have to be borne by the National Board of Revenue.

Last fiscal year, the NBR collected Tk 369,528 crore. Based on current trends, officials estimate that the NBR revenue may reach Tk 400,000 crore this year.

That means next year’s collection will have to increase by Tk 200,000 crore to hit the target.

Meeting this revenue target will be the biggest challenge for the finance minister in managing large expenditure expectations.

Beyond revenue collection, deficit financing will rely on about $11 billion in foreign assistance, including roughly $3 billion in budget support. This target is being set without any loan from the International Monetary Fund.

In the first 10 months of the fiscal year, $4 billion in foreign assistance has been utilised. By June, including budget support, $7 billion is expected to be used.

Therefore, removing obstacles to project implementation funded by foreign aid and securing budget support through reforms will be another major challenge in the upcoming budget.

The budget deficit is expected to be set at Tk 243,000 crore, or 3.55 percent of GDP, which is below the globally accepted level of 5 percent of GDP.

Under the previous Awami League-led government, budget deficits were proposed between 4 and 5 percent, though during COVID it exceeded 6 percent in one year.

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