As Finance Minister Amir Khosru Mahmud Chowdhury prepares to place a Tk9.38 lakh crore national budget for FY2026-27 before Parliament on Thursday, economists and financial sector experts are urging the government to prioritise economic stabilisation and recovery rather than pursuing ambitious growth targets.
They argue that Bangladesh’s economy is currently facing a challenging period marked by high inflation, stress in the banking sector, weak private investment, and lingering effects of financial mismanagement and malpractice under the previous Awami League government. Nearly 500 factories reportedly shut down during the interim administration, while foreign direct investment has remained subdued.
Distinguished Fellow at the Centre for Policy Dialogue (CPD) Dr Mustafizur Rahman, said the budget should first address structural weaknesses. He stressed that stabilisation must come before growth, adding that reforms are needed in the banking system, investment infrastructure, and port management, along with a clear roadmap for the post-LDC graduation transition.
International financial institutions, including the World Bank and IMF in their 2026 assessments, have also flagged high inflation, weak revenue mobilisation, a stressed banking sector, and volatile private investment as key risks for Bangladesh. They have called for a long-term structural reform agenda.
Professor Rumana Haq of Economics Department at University of Dhaka warned that major social protection initiatives such as family card and farmer card programmes would require fiscal stability to be effective, noting that without good governance and stability, intended beneficiaries may not receive adequate support.
To finance the upcoming budget deficit, the government plans to borrow nearly Tk2.5 lakh crore, including around Tk1.35 lakh crore from domestic banks. Economists caution that this heavy reliance on bank borrowing could strain the financial system further.
Investment Corporation of Bangladesh Chairman Professor Abu Ahmed emphasised the need to strengthen capital and bond markets, suggesting asset securitisation and addressing structural issues discouraging major companies from operating in Bangladesh.
Economists also pointed out that Bangladesh’s ambition of becoming a $1 trillion economy by 2034 requires sustained growth of at least 7 per cent annually. However, they warned that with lending rates around 15 per cent, investment momentum will remain weak unless borrowing costs fall and private sector confidence improves.
Emeritus Fellow at Unnayan Samonnay Khondoker Sakhawat Ali highlighted a deeper concern: declining trust in the banking sector due to large-scale financial irregularities and depositors’ inability to access their funds, calling it a serious warning sign for the economy.
Overall, experts said the FY2026-27 budget should avoid overly ambitious projections and instead focus on stabilising the economy first, paving the way for stronger growth in the following year.
