Finance minister set to unveil Tk 7,97,000 crore budget

Finance Minister Abul Hassan Mahmood Ali is going to unveil his as well as the new government's first budget today. 

This is the 54th budget of the country.

The minister is expected to place a Tk 7,97,000 crore budget for 2024-25 in parliament in the afternoon.

The budget for the fiscal year beginning on July 1 will look to restore macroeconomic stability, reduce inflation, and contain pressure on foreign currency reserves.

The FY25 budget is likely to be just 4.6 percent bigger than the current one, much lower than the year-on-year average spike of 11 percent seen in the last five years. The current fiscal year's budget was 12.35 percent larger than the previous year's.

The budget comes at a time when the economy is reeling under a prolonged economic crisis, driven by both external and internal factors.

The government's fiscal position has tightened owing to lower-than-expected revenue collections. Therefore, it is not possible to raise the budget size as per expectations.

The economic growth target was set at more than 7 percent in the current fiscal year, and the target for FY25 is likely to be 6.75 percent.

The government has also set an ambitious inflation target of 6.5 percent although it averaged more than 9 percent in the past two years owing to largely ineffective steps on the part of the central bank and the government.

In the upcoming budget, the finance minister is likely to contain the budget deficit to 4.6 percent of GDP, a level last seen a decade ago. The deficit is likely to be Tk 2,56,000 crore.

Amid lower revenue collections, the government has been forced to reduce its funding for the Annual Development Programme for the first time.

It is likely to set a collection goal of Tk 5,41,000 crore in FY25, an 8.2 percent increase from the previous year. The National Board of Revenue may be given a task to raise Tk 4,80,000 crore.

The budget may include an opportunity for legalising undisclosed wealth.