Finance Minister Amir Khosru Mahmud Chowdhury has said the government expects inflationary pressures to ease gradually through structural reforms aimed at lowering business costs, improving efficiency and strengthening supply chains.
Speaking at a post-budget press conference at the Osmani Memorial Auditorium on Friday, a day after presenting his first national budget, he said inflation in Bangladesh was the result of several years of accumulated pressures rather than a short-term problem.
“Inflation in Bangladesh is not a short-term phenomenon but the result of several years of accumulated pressures, compounded by global conflicts, rising import costs and weaknesses in the banking sector,” he said.
The minister noted that inflation had remained above 9 per cent for the past three years. He said conflicts in the Middle East had driven up global commodity prices, while loan defaults, fraud and money laundering had created capital shortages in banks, increasing borrowing costs across the economy.
He said imported goods had become more expensive because of global developments beyond Bangladesh’s control. However, domestic inflation could be reduced by cutting the cost of doing business through deregulation, administrative reforms and greater efficiency.
According to the minister, businesses continue to face excessive costs caused by lengthy approval procedures, bureaucratic delays, high lending rates, port inefficiencies and weaknesses in tax and regulatory systems.
“Inflation cannot be controlled by deploying police, regulatory agencies or government officials in markets. It has to be managed through sound policies and efficient administration,” he said.
The first budget of the newly elected BNP-led government has set an inflation target of 7.5 per cent for FY27, alongside an economic growth target of 6.5 per cent.
Amir Khosru said the government would prioritise improving the ease of doing business, reducing unnecessary regulations and increasing transparency across public institutions. Reforms in ports, logistics and procurement systems would also help lower costs, he added.
He stressed the importance of long-term procurement planning and said Bangladesh should maintain strategic reserves of fuel, food and fertiliser to reduce vulnerability to global market disruptions.
Referring to energy imports, he criticised past dependence on spot purchases and said the government intended to pursue longer-term procurement arrangements to secure better prices and strengthen energy security.
The minister defended the decision to increase salaries for public servants, saying it was necessary after years without significant adjustments despite rising living costs.
“When people face financial hardship, the tendency towards corruption increases. Improved salaries should help reduce that pressure while ensuring a better standard of living for government employees,” he said.
Employment generation was identified as a central objective of the budget. The minister said investments in education, skills development and private-sector growth would help create jobs both domestically and overseas.
He highlighted vocational education, reskilling and upskilling programmes aimed at improving employability, particularly among young people and educated jobseekers.
“Investment means employment. Our focus is on creating demand for jobs through increased investment and improved skills,” he said.
Amir Khosru described the budget as a shift from traditional approaches and said it reflected changing global economic realities. He reiterated the government’s commitment to reducing reliance on domestic bank borrowing, arguing that excessive government borrowing often crowds out private-sector credit. Planned borrowing from local banks has already been reduced compared with the previous fiscal year, he added.
The minister also defended the budget’s focus on social protection, saying the largest investments had been directed towards programmes supporting low-income and vulnerable groups.
Initiatives including the Family Card programme, farmer support schemes, universal healthcare and preventive healthcare services were designed to improve living standards while helping beneficiaries access better employment opportunities, he said.
He placed particular emphasis on the proposed “creative economy” initiative, which seeks to integrate artisans, performers, cultural workers and rural entrepreneurs into the mainstream economy.
The programme will provide financing, training, design support and market access for traditional craftsmen, weavers, potters, musicians and other creative workers whose contributions have largely remained outside formal economic planning.
The government has allocated Tk 800 crore to launch creative economy projects, including creative centres, cultural districts, tourism-linked initiatives and heritage restoration programmes.
“Our objective is to monetise culture and creativity so that artists, craftsmen and performers can improve their livelihoods while contributing to economic growth,” he said.
The minister also announced a review of outdated mouza land valuation rates, which often remain well below market prices and create opportunities to legalise undeclared income through property transactions.
A committee has been formed to revise the rates and bring them closer to actual market values. However, he acknowledged that the process would require a nationwide survey and could not be completed before the budget takes effect.
Responding to concerns about implementation, he said the government would establish a high-powered task force and an online complaints platform to monitor reforms and strengthen accountability.
“No one will be exempt from scrutiny if delays or violations occur. We are committed to implementation,” he said.
In his opening remarks, the minister described the FY27 budget as an inclusive plan prepared under exceptional circumstances. The Tk 9.38 lakh crore budget, unveiled in parliament on Thursday under the theme “Journey Towards a Democratic, Humane and Inclusive Economy”, was completed within less than two months of the new government taking office.
He said the budget aimed to stabilise the economy, restore public confidence, expand opportunities and lay the foundation for sustainable and inclusive growth.
While budget preparation in Bangladesh typically takes around six months, the current administration had only one and a half to two months following the political transition and formation of the elected government.
“Completing everything within one and a half to two months was a difficult task. Yet, with the cooperation of advisers, secretaries, officials and all those involved in the process, we were able to prepare the budget,” he said.
The minister said the budget was prepared in a unique political and economic environment following the country’s recent democratic transition.
“The true spirit of a budget is to reflect the wishes and aspirations of the people. For many years, the people of Bangladesh were deprived of that opportunity,” he said.
Referring to the democratic movements and the July-August uprising, he said many people had lost their lives, suffered injuries, lost jobs and businesses, or endured hardship during the struggle for democratic rights.
He said the 12 February national election had given citizens an opportunity to realise their democratic aspirations through an elected government, creating strong expectations for change.
“We understand the expectations of the people. Within the limited time available to us, we have tried to talk to as many stakeholders as possible and gather opinions and inputs from different segments of society,” he said.
According to the minister, the budget is guided by a philosophy of economic democratisation. He argued that economic opportunities had increasingly become concentrated among a limited number of individuals and organised interest groups.
“The economy had become an economy for a few people, a few groups and a few organised interests. Those who lacked access to patronage or organised influence were often left outside economic policymaking. We have tried to bring those people into the centre of our thinking,” he said.
Despite significant resource constraints, he said the government had sought to ensure that all sections of society benefited through allocations, programmes and policy initiatives.
The minister acknowledged that the administration inherited an economy weakened by institutional erosion, financial mismanagement and global uncertainty, making budget preparation particularly challenging.
He also pointed to major shifts in the global economy, saying the rules-based international economic order had weakened while wars and geopolitical conflicts were creating persistent uncertainty.
“The rules-based global economic order has weakened, and wars and conflicts have become the new normal. From Ukraine to the Middle East, these developments are disrupting economic activities and making long-term planning more difficult,” he said.
He added that these external pressures had been particularly significant for Bangladesh, especially in the energy sector.
Future public spending and development projects will be evaluated against four criteria: value for money, return on investment, job creation and environmental sustainability.
“We have clearly stated that future projects will move forward based on these four considerations — value for money, return on investment, job creation and environmental sustainability,” he said.
The minister said the framework would promote greater transparency, accountability and effectiveness in public spending.
“A democratically elected government’s primary responsibility is accountability to the people,” he said. “That is why we are here to answer questions and explain our policies to citizens through the media.”
