In a dramatic turn of fiscal planning, Bangladesh’s interim government has decided to leave the crucial task of revising the current budget — and shaping the next one — to the yet-to-be-elected administration. The move effectively shifts the country’s financial steering wheel to the incoming government, which will inherit both the opportunities and the challenges of a slowing economy. According to high-level sources, the budget revision and projection work are expected to take place in March next year, after the national election. The revised budget will be tailored to reflect the new government’s priorities, with early estimates suggesting that the overall budget size could shrink by around Tk 20,000 crore.
The decision came at a meeting of the Fiscal, Monetary, and Exchange Rate Coordination Council held on Monday afternoon at the Secretariat — the first such meeting for the 2025–26 fiscal year. The session, chaired virtually by Finance Adviser Dr. Salehuddin Ahmed, was followed by a Budget and Resource Management Meeting under his leadership. Both meetings, which began at 3 PM, lasted for nearly two hours of intense discussion.
Economic Reality Check: Slower Growth, Persistent Inflation
During the meeting, the council reviewed the progress across key economic sectors, as well as recent global and domestic shifts impacting Bangladesh’s economy. A multimedia presentation by Additional Secretary Dr. Ziaul Abedin of the Finance Division painted a sobering picture — the economy is moving at a slower pace than anticipated.
Officials disclosed that sluggish public and private investment has dragged down growth forecasts. As a result, GDP growth for the current fiscal year (2025–26) is expected to fall by 0.5 percentage points, settling at 5%, compared to the 5.5% target projected in June’s budget.
Meanwhile, the government’s effort to rein in inflation has faltered. The budget target of reducing inflation to 6.5% now appears unattainable; the revised inflation forecast stands at 7% by year-end.
Looking ahead, preliminary projections for the 2026–27 fiscal year set GDP growth at 6% and inflation at 6.5%, suggesting cautious optimism but acknowledging ongoing structural constraints.
Revenue Collection — A Bright Spot Amid Gloom
Amid the challenges, one sector appears to be holding strong — revenue collection. Officials reported steady growth in tax revenues over the past three months, with expectations of further improvement as the income tax deadline in November approaches.
During the meeting, Finance Adviser Dr. Salehuddin Ahmed reportedly pressed the National Board of Revenue (NBR) Chairman multiple times to “intensify efforts to boost revenue collection,” underscoring the government’s reliance on robust fiscal inflows to maintain stability.
Uncertain Future Awaits March Decisions
A senior official present at the meeting, requesting anonymity, revealed that while the session was initially scheduled for December, it was moved forward by a month to address emerging fiscal challenges. However, he noted that none of the current projections are final, as a new government is expected to assume power following elections in February.
“Everything will change once the new government comes in,” the official said. “They will set their own priorities, revise the budget, and outline the next fiscal plan. By March, we’ll likely have a clearer picture of the revised or preliminary budget framework.”
The official further admitted that with only three months of fiscal data available, the interim government lacks sufficient grounds to make a comprehensive revision:
“It’s practically impossible to revise the budget meaningfully at this stage. The incoming administration must take over the process.”
A Transitional Pause Before Fiscal Reset
As Bangladesh stands at the crossroads of political transition and economic recalibration, the decision to defer budget control reflects both caution and political pragmatism. With growth slowing, inflation stubborn, and public investment lagging, the next government faces a daunting challenge — to restore fiscal momentum and reignite confidence in the country’s economic trajectory.
For now, the numbers tell a story of restraint. The real drama — and the next act of Bangladesh’s economic recovery — will begin after the ballots are cast.