Bangladesh’s interim government is preparing to unveil a rare contractionary budget on June 2, driven by a sharp rise in interest payment that is crowding out fiscal space and forcing spending cuts.
Bangladesh has continued to showcase a weak performance in the open budget rankings among its South Asian peers, reflecting a lack of transparency and accountability in the formulation and implementation of fiscal measures.
The interim government is set to slash the development budget for the fiscal year (FY) 2025-26 by 14 percent year-on-year, as it struggles with limited fiscal space and steers away from costly mega-projects.
The interim government (IG) is set to present its FY26 budget on June 2. The anticipation is that their budget will depart from the past.
The next budget may be slightly smaller than the current fiscal year’s, but non-development spending is expected to rise by over 5 percent due to higher debt servicing costs, food subsidies, and a special allocation for bank reforms.
The plan comes as $42.85b foreign funds remained unused at start of current FY
The government’s revenue collection and spending targets for fiscal year (FY) 2025-26 have been set in line with the recommendations of a taskforce given the task of developing strategies to boost the economy, according to the finance ministry.
The new target has raised eyebrows, given the underwhelming performance in revenue collection so far
Bangladesh has continued to showcase a weak performance in the open budget rankings among its South Asian peers, reflecting a lack of transparency and accountability in the formulation and implementation of fiscal measures.
Bangladesh’s interim government is preparing to unveil a rare contractionary budget on June 2, driven by a sharp rise in interest payment that is crowding out fiscal space and forcing spending cuts.
The interim government is set to slash the development budget for the fiscal year (FY) 2025-26 by 14 percent year-on-year, as it struggles with limited fiscal space and steers away from costly mega-projects.
The next budget may be slightly smaller than the current fiscal year’s, but non-development spending is expected to rise by over 5 percent due to higher debt servicing costs, food subsidies, and a special allocation for bank reforms.
The interim government (IG) is set to present its FY26 budget on June 2. The anticipation is that their budget will depart from the past.
It is expected that the upcoming national budget will address the economic well-being of the poor.
The plan comes as $42.85b foreign funds remained unused at start of current FY
The government’s revenue collection and spending targets for fiscal year (FY) 2025-26 have been set in line with the recommendations of a taskforce given the task of developing strategies to boost the economy, according to the finance ministry.
The new target has raised eyebrows, given the underwhelming performance in revenue collection so far
Finance Adviser Salehuddin Ahmed yesterday said the interim government will not incorporate any mega projects that cost billions of dollars in the next budget for FY2025-26.
