The government of Bangladesh has placed macroeconomic stability at the heart of its economic agenda, outlining a broad package of fiscal, monetary and institutional reforms aimed at reducing inflation, strengthening public finances and lowering reliance on debt-driven growth.
According to the proposed budget, policymakers view inflation as one of the most pressing challenges facing the economy, noting that prolonged price pressures have weakened household purchasing power and affected overall economic stability. The government acknowledged that while global developments have contributed to rising costs, domestic factors such as supply chain inefficiencies, market distortions, inadequate competition and structural weaknesses have also played a significant role.
To address these challenges, authorities plan to strengthen foreign exchange reserves, improve external sector resilience and ensure greater stability in the foreign exchange market. Given Bangladesh’s dependence on imports, the government believes that limiting exchange rate volatility will be crucial in controlling inflationary pressures.
The budget also highlights the importance of closer coordination between fiscal and monetary policies while maintaining adequate credit flows to productive sectors of the economy. Efforts to boost exports, encourage remittance inflows and manage non-essential imports are expected to support external balance and improve overall economic confidence.
A major component of the reform programme focuses on enhancing domestic resource mobilisation. As part of this effort, the government has initiated a separation between revenue policy formulation and revenue administration, aiming to create a more professional, transparent and evidence-based tax system.
Planned tax reforms include expanding the taxpayer base, digitising registration and filing procedures, modernising VAT administration, strengthening withholding tax compliance and introducing risk-based audit systems. Authorities also intend to simplify procedures and improve taxpayer services to encourage voluntary compliance.
The budget further proposes a comprehensive review of tax exemptions and incentives to ensure greater transparency and accountability. Officials aim to raise the revenue-to-GDP ratio from around 8 per cent to 11 per cent and the tax-to-GDP ratio from 6.8 per cent to 9.6 per cent by FY2030-31.
Addressing concerns over public debt, the government attributed current fiscal pressures to extensive borrowing for what it described as poorly planned projects undertaken by the previous administration. In response, it has set a goal of improving Bangladesh’s debt risk rating from “moderate” to “low” through stronger fiscal discipline, higher revenue collection and modernised debt management.
The government also signalled a gradual shift away from debt-led growth, emphasising private-sector investment, production expansion and employment generation as the key drivers of sustainable economic development in the years ahead.
