Experts have raised concerns over the proposed budget for Bangladesh’s fiscal year 2026-27, describing its revenue targets as highly ambitious amid escalating debt obligations, subsidy demands, and expanding expenditure commitments. The warnings emerged during a pre-budget dialogue held on Monday, titled “National Budget 2026-27: Policies, Priorities and Climate Opportunities,” organized by the Citizens Platform for SDGs, Bangladesh, in collaboration with the Centre for Policy Dialogue (CPD).

Shubhra Rani Chakravarty, Additional Director of Research at CPD and moderator of the session, highlighted that the government has set a revenue growth target exceeding 20 percent compared to the current fiscal year’s goal. She noted that this would represent a record-setting increase, citing Bangladesh’s highest historical revenue growth at just over 19 percent in 2017. Chakravarty emphasized the difficulty of achieving such growth given the current economic and structural constraints, particularly with rising subsidy commitments.

Sugata Roy Chowdhury, a Distinguished Fellow at CPD, underlined the government’s ongoing challenge in managing revenue amidst sharply increasing debt and interest repayments. He referred to the budget outlook as marked by austerity unprecedented in recent years and stressed the urgency of action to avoid jeopardizing growth objectives. According to Chowdhury, fiscal consolidation efforts intended to stabilize the macroeconomy are likely to entail significant cutbacks in social sector funding and human capital investments. He advocated for more realistic revenue forecasting, expenditure realignment, and enhanced revenue mobilization efforts. Chowdhury also urged policymakers to minimize short-term political considerations and prioritize long-term institutional and tax reforms.

Dr. Debapriya Bhattacharya, another CPD Distinguished Fellow, echoed these concerns, describing the revenue projections as “near impossible” to achieve without resorting to risky measures or distortions. He pointed out the government’s anticipated heavy reliance on indirect taxes, which tend to be regressive and disproportionately affect low-income populations.

The budget is expected to see the fiscal deficit widen to 6.3 percent of GDP in FY27, up from an estimated 6.0 percent this year. Meeting this deficit will require additional borrowing, which could exacerbate concerns over debt sustainability. Experts at the dialogue called for improvements in fiscal sustainability through enhanced tax administration and an expanded tax base to address the country’s financial challenges more effectively.