Budget realistic but lacks concreate reform measures: Ahsan H Mansur

Ahsan H Mansur, an economist and former Bangladesh Bank governor, said the government has presented the budget in a highly challenging global and domestic environment. 

While describing it as a largely realistic budget, he argued that the new government's ambitious targets have resulted in an expansionary fiscal plan whose implementation will be extremely difficult.

According to Mansur, the budget faces three major challenges. First, achieving the projected revenue target will be difficult, as the benefits of ongoing reforms are unlikely to materialise before three to five years. 

Second, the targeted growth in revenue collection appears overly optimistic. 

Third, financing the budget remains a concern, given the fragile condition of the banking sector and uncertainty surrounding foreign financing.

He noted that the banking system is already under stress, and recent developments surrounding Islamic Bank could further complicate liquidity conditions. 

Questions remain about how banks will mobilise sufficient funds and whether the government will eventually resort to increased money creation, he added.

The economist also expressed concern over external financing.

The former BB governor pointed out that Bangladesh's net foreign financing was negative in the current fiscal year, meaning repayments exceeded new inflows.

“If this trend continues, securing support from the IMF and other development partners could become increasingly challenging.”

On banking sector reforms, he said the budget correctly identifies the sector's problems, but lacks clear and specific reform initiatives. 

While proposals such as the Bank Resolution Act and measures to strengthen governance are positive, the budget does not provide a concrete roadmap for implementation.

He stressed that statements alone are insufficient and that meaningful reforms must begin immediately, even if their benefits take years to materialize.

Regarding the proposed Tk 60,000 crore stimulus package for closed industries, he warned that it could fuel inflation by injecting a large amount of money into the economy without guaranteeing productive outcomes. 

“Instead of providing funds to previously failed businesses, he suggested that closed factories be sold to capable new investors who can operate them efficiently.”

Ahsan H Mansur also questioned the absence of several previously discussed reform measures, including changes related to financial institutions, tax administration reforms, and greater independence for Bangladesh Bank.

Referring to the ongoing unrest situation at Islamic Bank, he warned that the crisis could worsen significantly if not resolved quickly. 

Given the bank's large depositor base, prolonged uncertainty could create broader financial instability. 
While mentioning the Islami Bank issue, he urged all stakeholders to seek a compromise solution in the national interest and recommended placing the institution under a neutral and professional management structure acceptable to all parties