Bangladesh proposes record spending in 1st budget under Rahman government

Bangladesh's government on Thursday unveiled its first national budget, proposing record spending, expanded social programs and a large fiscal deficit as it seeks to boost growth and curb inflation.

The budget is the first major economic policy blueprint of Prime Minister Tarique Rahman's administration, which took office earlier this year after the Bangladesh Nationalist Party (BNP) returned to power for the first time since 2006.

Finance Minister Amir Khosru Mahmud Chowdhury presented a Tk 9.02 trillion ($74 billion) budget for fiscal year 2026-27, up from a revised Tk 8.49 trillion ($69.6 billion) in the outgoing fiscal year. The budget projects a deficit of Tk 2.26 trillion ($18.5 billion), equivalent to about 4.1% of GDP.

The government has set a 6.5% economic growth target and aims to reduce inflation to 6.5% after nearly two years of elevated price pressures.

The spending plan includes tax relief for several sectors, incentives for investment in energy and solar power, expanded social safety-net programs and higher public-sector salaries. It also earmarks Tk 10 billion ($82 million) for the creative economy, including technology startups, digital entrepreneurship and cultural industries.

To finance the budget, the government expects to raise Tk 6.76 trillion ($55.4 billion) in revenue, including Tk 5.64 trillion ($46.2 billion) through the National Board of Revenue. The Annual Development Programme has been set at Tk 2.95 trillion ($24.2 billion).

The budget comes as Bangladesh's economy surpassed the $500 billion mark for the first time this week.

Economists say the budget reflects an ambitious effort to stimulate growth and expand welfare support, but warn that revenue targets may prove difficult to achieve in a country where the tax-to-GDP ratio remains below 8%.

The budget marks the first major economic test of the Rahman administration's ability to balance economic revival with fiscal sustainability.