STAR BUSINESS REPORT

The actual fiscal deficit in the proposed national budget for fiscal year 2026-27 could be close to Tk 4 lakh crore, according to Research and Policy Integration for Development (RAPID).

The think tank said that the government is unlikely to meet its ambitious revenue and foreign financing targets.

RAPID made the projection at a seminar in Dhaka yesterday on the proposed budget for FY27, based on past trends in revenue collection by the National Board of Revenue (NBR) and foreign aid inflows.

In the budget, the finance minister has projected a deficit of Tk 2.43 lakh crore for the next fiscal year, equivalent to 3.6 percent of GDP.

RAPID Chairman Mohammad Abdur Razzaque said this projection may be “misleading”.

He said even under an optimistic scenario, NBR revenue may remain below Tk 5 lakh crore, leaving a shortfall of around Tk 1 lakh crore.

The government has set a net foreign borrowing target of Tk 1.09 lakh crore for FY27. But Razzaque said shrinking global concessional funding could leave foreign inflows about Tk 50,000 crore below the target.

Taken together, the economist estimated the actual deficit could reach Tk 3.93 lakh crore, or 5.8 percent of GDP.

Razzaque said that rising reliance on bank borrowing could weaken private sector recovery. However, he added that the deficit could appear smaller if spending targets are not fully met.

“Under a more plausible scenario, only 80-85 percent of the spending target might be met, which would reduce the deficit. But that would also mean that many allocation promises will not be fulfilled.”

PRIORITISE STABILISATION, GROWTH WILL FOLLOW

The RAPID chairman said the budget must support recovery without weakening macroeconomic stability.

He said the government is pushing growth to reach its goal of a $1 trillion economy by 2034, but this rush could undermine stability.

“A budget that expands spending without strong revenue mobilisation and prudent borrowing could prolong inflation, crowd out private investment, weaken reserves and delay recovery,” he said.

“If economic stabilisation can be ensured, growth will come on its own,” he said, adding that recovery must be built on stabilisation.

He, however, praised several measures proposed by the government to improve the ease of doing business.

FIVE GOVT STEPS TO ATTRACT INVESTMENT

At the seminar, Prime Minister’s Adviser on Finance and Planning Affairs Rashed Al Mahmud Titumir said the government is moving towards a $1 trillion economy and has prioritised five areas to support investment.

He listed them as policy continuity, including a five-year tax framework already announced in the budget, reducing red tape and corruption, ensuring energy security, coordinating monetary and fiscal policy while maintaining central bank autonomy to control inflation, and improving communication infrastructure.

He said revenue collection would improve next year due to two factors -- economic recovery and reduced errors or evasion in tax collection.