United News of Bangladesh

The Centre for Policy Dialogue (CPD) on Friday described the proposed national budget for fiscal year 2026-27 as an ambitious attempt to drive economic recovery through human development and private-sector-led growth, but cautioned that its success will depend more on the quality of execution than on its size. CPD Executive Director Dr Fahmida Khatun presented the think tank's assessment of the FY27 budget at a city hotel in Gulshan, a day after Finance Minister Amir Khosru Mahmud Chowdhury presented the Tk 9.38 lakh crore budget – largest in the country's history – in Parliament under the theme “Journey Towards a Democratic, Humane and Inclusive Economy.” “The underlying philosophy of the proposed FY27 budget appears to be one of economic recovery through human development, private sector-led growth, and social protection,” she said, noting that the budget also emphasises jobs, entrepreneurship, education, healthcare, and welfare, broadly aligning with the BNP government's election manifesto. Macroeconomic Targets CPD flagged that most key macroeconomic targets set in the budget appear overly optimistic, given the current economic reality. The budget projects GDP growth of 6.5 percent in FY27, a significant recovery from the provisional estimate of 5.0 percent for the revised FY26. However, CPD noted that the Bangladesh Bureau of Statistics (BBS) has estimated actual GDP growth for FY26 at just 4.14 percent, making the FY27 target a steep climb. The inflation target of 7.5 percent for FY27 was also questioned. As of May 2026, the 12-month moving average inflation stood at 8.63 percent, already above the FY26 target of 7.0 percent. CPD said achieving the FY27 target will require improved food supply, stable energy provision, and prudent monetary policy working in concert. On private sector credit, the budget projects growth of 9.4 percent in FY27, while actual private sector credit growth as of April 2026 was only 4.75 percent. The think tank called the target “possibly optimistic”, given the government's high reliance on bank borrowing and the economic slowdown. It also noted that the exchange rate target of Tk 127.0 per US dollar for FY27 appears inconsistent with the interbank rate of Tk 122.75 as of June 4, 2026. Revenue Mobilisation CPD expressed concern over the budget's revenue mobilisation targets, projecting an 18.2 percent growth over the revised FY26 figures. Based on actual revenue data up to March 2026, CPD's own projection suggests the actual FY26 revenue outturn could be significantly lower, meaning approximately an additional Tk 2,45,000 crore may need to be mobilised, a highly challenging task. The National Board of Revenue (NBR) tax is projected to grow by 20.1 percent in FY27, accounting for 86.9 percent of incremental revenue, with VAT and income taxes set to lead the charge. CPD said the budget deficit of 3.6 percent of GDP, higher than 3.3 percent in the revised FY26, will be financed through a combination of foreign loans (45.2 percent) and bank borrowing (46.1 percent), with bank borrowing remaining the dominant financing source. ADP Implementation The Annual Development Programme (ADP) for FY27 has been set at Tk 300,000 crore, 30.4 percent higher than the FY26 ADP and equivalent to 4.4 percent of GDP. CPD termed this allocation “ambitious” in light of severe implementation underperformance: only 35.4 percent of the FY26 ADP was spent in the first 10 months of the year. Education and health sectors received the largest incremental allocations, rising by Tk 21,034 crore and Tk 17,382 crore, respectively in the ADP. The think tank called it “inspiring” that both sectors remain among the top five recipients, with health's ADP share jumping to 11.8 percent from 7.9 percent in FY26. However, it raised a red flag on agriculture, whose ADP share fell to 3.6 percent from 4.7 percent, a development the organisation called “an alarming signal at a time when ensuring food security remains a high priority.” On mega projects, CPD found that of 20 flagship infrastructure projects receiving Tk 58,747 crore, nearly 20 percent of total ADP, eight are scheduled for completion in FY27, yet the think tank concluded that “none of these will be completed by FY27” even under maximum resource utilisation. The Rooppur Nuclear Power Plant has progressed to only 68.3 percent completion after nearly a decade, while MRT Line 1 stands at a mere 5.9 percent after six years of construction. CPD also highlighted a troubling trend: the number of ADP projects carrying only a symbolic allocation of Tk 1 lakh or below has risen to 77 in FY27, up from 45 in FY26, indicating worsening tokenism in project listing. Meanwhile, 377 “carryover” projects remain in the pipeline, and 1,063 projects sit without any allocation whatsoever. Taxpayers Relief  On fiscal measures, CPD said the personal income tax (PIT) structure remains unchanged for the current and next assessment years, with the tax-free threshold rising to Tk 3,75,000. The think tank pointed out that while the threshold was raised from Tk 3.50 lakh to Tk 3.75 lakh, inflation-indexing will require it to be at least Tk 3.80 lakh, meaning low-income earners received no real purchasing power relief. CPD welcomed the government's five-year PIT roadmap, including a threshold rise to Tk 4,00,000 for AY2028-29 and a new 35 percent top slab for incomes above Tk 35 lakh from FY29, as providing medium-term predictability. However, it cautioned that the roadmap's thresholds need to more closely track inflation to ensure adequate income protection. On corporate tax, CPD noted that Bangladesh's 27.5 percent rate for non-listed companies remains higher than regional competitors, including Vietnam (20 percent), Indonesia (22 percent), and India (22 percent under the concessional rate), potentially weakening the country's investment attractiveness. Health Budget The total health allocation has risen 50 percent in FY27 to Tk 62,852 crore, with the development component doubling to Tk 35,026 crore. The health budget's share of GDP has climbed to 0.92 percent in FY27 from 0.67 percent in FY26. However, CPD raised concern over Bangladesh's out-of-pocket health spending, which at 79 percent of total health expenditure is the highest in South Asia and the seventh highest among 44 least developed countries. Budget utilisation in health has also been declining, with the development component spending rate falling to just 30 percent in FY25 from 80 percent in FY15. CPD recommended increasing corporate tax on tobacco manufacturers from the current 45 percent to 55 percent and the surcharge from 2.5 percent to 7.5 percent, calling the current tobacco tax structure inadequate in discouraging consumption. LDC Graduation The think tank identified two notable gaps in the budget's trade and external sector strategy. Unlike the previous year's budget, FY27 does not include a dedicated tariff rationalisation roadmap in view of Bangladesh's impending LDC graduation, which the government has formally requested to defer by at least three years. CPD called it a “notable gap,” saying a clear roadmap to reduce anti-export bias and prepare industries for preference erosion should have been a priority. On the US-Bangladesh Agreement on Reciprocal Trade (ART), it noted that no identifiable tariff changes linked to the agreement were included in the FY27 budget. While calling this “possibly prudent” given the US Supreme Court's ruling that the underlying executive authority for reciprocal tariffs was not legally sanctioned, CPD called for clear government communication on how it intends to proceed with ART commitments, including a US$ 3.7 billion Boeing aircraft deal signed by Biman in April 2026. Budget Execution Wrapping up the presentation, CPD Executive Director Fahmida said the budget represents the new BNP government's first major opportunity to demonstrate its ability to drive economic recovery through sustained structural reform. “Though the budget is much larger than previous ones, its success will ultimately depend less on its size than on its quality of execution,” she said. “This will require strong institutions that have the capacity to implement the budget efficiently and deliver tangible outcomes.” CPD's analysis was part of its Independent Review of Bangladesh's Development (IRBD) programme, led by Dr Fahmida, alongside Distinguished Fellow Prof Mustafizur Rahman and Research Director Dr Khondaker Golam Moazzem.

The Centre for Policy Dialogue (CPD) has identified the target to achieve the proposed revenue collection of Tk 695,000 crore and bringing inflation down to 7.5 percent as the biggest challenges in implementing the national budget for fiscal year 2026-27. Finance Minister Amir Khosru Mahmud Chowdhury on Thursday unveiled a record Tk 938,000-crore budget, the largest in Bangladesh's history. Giving instant reaction to the budget at a press briefing at CPD’s Dhanmondi office later in the day, CPD Executive Director Fahmida Khatun said budget targets must be realistic to ensure effective implementation. “If the targets are not realistic, it will be difficult for the government to implement the budget, which could undermine economic discipline.” She described the revenue target as particularly ambitious, noting that Bangladesh has historically struggled to meet its revenue collection goals. “Although high revenue targets are regularly set, they often remain unattained. The proposed target requires a significant jump in revenue mobilisation, which will be a major challenge for the government,” Fahmida said. She warned that failure to achieve the revenue target could make it difficult to contain inflation within the projected 7.5 percent level. “Average inflation in the current fiscal year is around 9 percent. Bringing it down by about 1.5 percentage points within a year will be challenging. If the government falls short in revenue collection and resorts to increased bank borrowing, the task will become even more difficult.” The CPD executive director said inflation control would require a stable exchange rate, improved food and energy supply systems, and prudent monetary management. “Bangladesh is currently pursuing a contractionary monetary policy. In this context, policymakers will need to strike a careful balance to stimulate investment. Greater coordination between fiscal and monetary policies is also necessary.” While describing the proposed GDP growth target as ambitious, she said it was not unattainable given the size of Bangladesh’s economy and population. The budget projects economic growth at 7.5 percent, compared to an estimated 6.5 percent growth in the current fiscal year. “To achieve this target, private investment and productivity must increase, while exports need fresh momentum. At the same time, ongoing reforms must continue. Given the current investment climate, the condition of the financial sector and persistent energy challenges, achieving the target will be quite difficult,” Fahmida said. She also observed that the budget could have placed greater emphasis on economic stability rather than growth. However, the CPD executive director welcomed tax incentives for solar panels and electric vehicles, as well as the budget's focus on skills development, agriculture, and small and medium enterprises (SMEs), describing them as positive measures for the economy. CPD Distinguished Fellow Mustafizur Rahman was also present at the briefing.

The American Chamber of Commerce in Bangladesh (AmCham) welcomed the Government’s proposed national budget for FY2026–27, noting its balanced focus on macroeconomic stabilisation, social protection, and long-term growth. With a total outlay of Tk. 938,000 crore, the budget targets 7.5% inflation and 6.5% GDP growth, reflecting a pragmatic approach amid ongoing global and domestic economic challenges. AmCham acknowledges the Government’s efforts to maintain fiscal discipline while prioritising human capital development, investment promotion, and support for vulnerable groups. AmCham observes that the proposed fiscal deficit of 3.55% of GDP is broadly prudent. However, reliance on domestic borrowing to finance the deficit may constrain private sector credit and increase borrowing costs. Continued coordination between fiscal and monetary policies will be essential to sustain macroeconomic stability and support private sector-led growth. On revenue mobilisation, AmCham notes the ambitious target of Tk. 6.95 lakh crore and emphasises the importance of comprehensive tax administration reform. The Chamber welcomes ongoing initiatives to enhance digitalisation, strengthen compliance, and improve transparency, which are critical to broadening the tax base and reducing reliance on borrowing. In this context, AmCham encourages revisiting revenue governance reforms, including the potential separation of tax policy and administration functions, to strengthen institutional effectiveness. AmCham commends the increased allocations toward education, healthcare, and social safety net programmes, including Tk. 1.45 lakh crore for social protection. The Chamber underscores the need to complement these allocations with improvements in quality, governance, and service delivery outcomes, particularly in education and healthcare. The expansion of the Annual Development Programme to Tk. 3 lakh crore is a positive step toward strengthening infrastructure and connectivity. However, AmCham highlights the importance of addressing project implementation challenges, including delays and cost overruns, through better project readiness, rigorous evaluation, and performance-based monitoring. The Chamber also welcomes measures aimed at supporting export competitiveness and trade facilitation, including reductions in certain import and export-related taxes. As Bangladesh prepares for LDC graduation, AmCham emphasises the need for structural reforms, policy predictability, and alignment with post-LDC obligations to ensure sustained competitiveness. On energy, AmCham appreciates the Government’s focus on renewable energy and sustainable growth, including incentives for solar power and electric vehicles. At the same time, it stresses the importance of ensuring reliable and affordable energy supply through continued investment in domestic resource development and infrastructure efficiency. Looking ahead, AmCham believes that while the FY2026–27 budget provides a strong foundation for economic resilience and growth, its success will depend on effective implementation, policy consistency, and strengthened public–private collaboration. AmCham Bangladesh remains committed to working alongside the Government and stakeholders to support reforms that enhance competitiveness, attract investment, and drive sustainable economic growth.

Former Bangladesh Bank Governor Dr. Ahsan H. Mansur on Thursday called for the immediate implementation of proposed amendments to the Bank Company Act to ensure discipline and restore confidence in the country's troubled financial sector. Sharing his immediate reactions to the national budget proposed for FY 2026-27, the former central bank chief emphasized that concrete structural reforms, rather than mere promises, are essential to dismantle single-family or concentrated control over commercial banks. "We previously proposed amendments to the Bank Company Act to limit the tendency of families to maintain excessive control over commercial banks. If these amendments are implemented, we will know that the government is genuinely sincere about reducing single or concentrated ownership. We want to see these reforms materialize," Dr. Mansur said. Highlighting the critical issue of external interference in the banking sector, the noted economist stressed that the independence of the central bank must be safeguarded through legislative backing. He disclosed that a draft proposal aimed at bolstering the autonomy of Bangladesh Bank had been submitted to the government and remains under consideration. He credited the current Adviser on Economic Affairs, Dr. Rashed Al Mahmud Titumir, with contributing significantly to refining the draft during his tenure on the Bangladesh Bank board. "If this revised draft is approved, Bangladesh Bank will become truly independent, and only then can we effectively eliminate external interference. Interference will not stop on its own," he noted. Dr. Mansur also raised questions regarding the status of the Financial Institutions Division (FID), pointing out a mismatch between government pledges and the ground reality. "The government had previously talked about abolishing the FID, and the Finance Minister himself expressed this intention. However, the division continues to function with full authority. If the government is truly committed to reducing state intervention, it should move forward with this crucial institutional reform," he stated. Warning that the ongoing economic uncertainties are largely self-inflicted, the former governor stressed that only visible, decisive actions can rebuild public trust and bring order back to the financial landscape. "This is not a matter of personal disputes or political rivalry; it is an issue of supreme national interest. All political issues can be resolved through dialogue, and this crisis too can be resolved based on mutual discussion and consensus," Dr. Mansur said, urging the newly elected administration to prioritize the interests of commercial banks, ordinary depositors, and the national economy.

The Association of Mobile Telecom Operators of Bangladesh (AMTOB) in a statement Thursday expressed their satisfaction over the government's move to withdraw the existing specific tax on SIM cards, and replace it with a 15% VAT levied on the actual sale price. AMTOB Secretary General Lt Col. Mohammad Zulfikar (Retd.) said, "In the proposed national budget for FY 2026–27 presented in the National Parliament today (Thursday), decision to convert the VAT on mobile SIM cards to standard value-based system is a timely and welcome initiative. Under this proposal, the existing will be withdrawn and replaced with a 15% VAT levied on the actual sale price." He added that the association believes this will play a positive role in bringing in nearly 40 percent of the country's marginalized population—who still remain outside the reach of telecommunications services—and will accelerate digital progress. The statement however also adds that to ensure the sustainable growth of the sector and further strengthen the pace of digital transformation, the government should reconsider several important policy measures, including reducing the tax burden on consumers, rationalizing the corporate tax rate, withdrawing VAT on spectrum, and removing the supplementary duty imposed on OTT services. "We hope the government will give due consideration to these issues and adopt a more balanced and forward-looking policy framework that will make Bangladesh's telecommunications sector more dynamic and inclusive," the statement added.

The Bangladesh Mobile Phone Consumers' Association (BMPCA) has welcomed the government's decision to withdraw the Tk 300 tax on new SIM cards in the proposed national budget for fiscal year 2026–27, describing it as a positive step towards greater digital inclusion. In a reaction to the budget issued on Thursday night, Association President Mohiuddin Ahmed said the move would benefit ordinary mobile users and help expand access to digital services across the country. “The withdrawal of the SIM tax will make it easier for people to obtain new connections. It will provide significant relief, particularly for low-income groups, students and rural populations,” he said. Mohiuddin noted that the decision would also accelerate the use of digital services, including mobile banking, online education and e-governance platforms. However, he expressed concern that removing the SIM tax alone would not be sufficient to ensure meaningful relief for consumers. “Mobile users are still burdened by the high rates of VAT, supplementary duty and other taxes imposed on mobile and internet services. These taxes continue to place a significant financial strain on consumers,” he said. He said the government should reduce the excessive tax burden on telecom services, ensure affordable internet access, improve network quality in rural areas and take effective steps to expand broadband infrastructure to make the telecommunications sector truly consumer-friendly. The association also urged the government to adopt a coordinated and long-term policy framework for the telecommunications sector to support the country's digital transformation goals. It said such measures are essential to ensure that all citizens can access quality telecom and internet services at affordable prices.

The government has proposed an allocation of Tk 4,401 crore for the Election Commission (EC) in the proposed national budget for the fiscal year 2026–27, marking a slight increase from the outgoing fiscal year. The EC is going to get increased allocation to arrange elections to some local bodies and with other electoral and administrative activities in the coming fiscal year. Finance Minister Amir Khosru Mahmud Chowdhury unveiled the proposed national budget for FY 2026-2027 in Parliament on Thursday afternoon. According to the proposed budget, Tk 4,401 crore has been allocated for the Election Commission Secretariat for 2026-2027 fiscal year, up from Tk 2,956 crore in the previous FY2025-2026 and Tk 4,346 crore in the revised budget of the same fiscal year. The allocation was higher in the revised budget from the original one in the outgoing fiscal year as the EC conducted the 13th parliamentary election on February 12, 2026. According to budget documents, the Election Commission plans to conduct two city corporation elections, four municipal elections, 10 upazila parishad elections, 10 union parishad elections, and by-elections to the Jatiya Sangsad and local government bodies in FY2026–27. Other planned activities include observance of National Voter Day at both central and field levels, updating the voter list with photographs, and continued issuance, printing and distribution of National Identity Cards (NID), including smart cards and laminated cards. The EC will also continue registration of citizens below 18 years of age, expand services for expatriate Bangladeshis, and further develop the NID system infrastructure. Besides, the commission will conduct audits and documentation of NID-related digital systems, strengthen cybersecurity measures, and continue partner services for identity verification. The EC plans for infrastructure development, including establishing a disaster recovery site (DRS) in Cumilla, setting up a mini archive/library for NID records, and strengthening ICT-based election management systems.    

A high-level bilateral meeting between Bangladesh and the United States was held in Washington DC on June 10, aiming to strengthen long-term cooperation in the energy sector, address global supply chain challenges, and expand technological partnerships. The Bangladesh delegation was led by State Minister for Energy and Mineral Resources Aninda Islam Amit while the US side was headed by U.S. Department of Energy's Under Secretary of Energy Kyle Hausvet, according to a press release issued on Thursday. The meeting, held in a cordial and constructive atmosphere, focused on energy security, infrastructure development, and the exchange of advanced energy technologies between the two countries. Both sides discussed opportunities for enhanced collaboration in ensuring stable energy supply chains and promoting sustainable energy development in the face of global market volatility. Bangladesh Ambassador to the United States Tarik Md. Ariful Islam was also present at the meeting. A Bangladesh delegation led by the State Minister for Power, Energy and Mineral Resources is currently visiting the United States to explore further potential cooperation in the energy sector, officials said.  

Finance Minister Amir Khosru Mahmud Chowdhury on Thursday said the government is implementing a wide range of projects on irrigation, flood management, riverbank protection, waterlogging mitigation, drainage improvement and salinity control as part of its sustainable water resources management strategy. He said special initiatives have been taken to restore at least one river in each division by removing illegal encroachments to maintain ecological balance. Under seven ongoing projects, measures are being implemented to clear encroachments and restore the natural flow of several rivers including Dhaleshwari, Louhajang, Alaikuri, Mogra, Salta, Sutang, Bakkhali and Barnai, the Minister said while placing budget in Parliament. The minister said a Water Quality Index (WQI) has been developed for rivers surrounding Dhaka, while an AI and deep learning-based real-time dashboard has been introduced to monitor groundwater levels, aiming to strengthen data-driven water governance. He further informed the House that the Ministry of Water Resources is implementing a nationwide programme titled “Excavation and Re-excavation of Rivers, Canals and Water Reservoirs,” under which 20,000 kilometres of canals, rivers and drainage channels are planned to be excavated over the next five years by relevant ministries. In FY 2026–27 alone, the ministry plans to excavate and re-excavate 680 kilometres of canals, irrigation canals and drainage channels. A GIS-based national canal database will also be developed under a separate project to identify and classify canals across the country. For flood protection, the government has set a target to construct, reconstruct and rehabilitate embankments and flood walls and improve river navigability over a total of 309 kilometres, while 484 kilometres of submerged shoals will be removed. Additionally, 292 kilometres of embankment and flood wall works are currently underway under a 180-day flood protection programme. He also highlighted impacts of upstream dams on the Teesta and Padma rivers, saying reduced water flow has affected agriculture, irrigation, fisheries and biodiversity in Bangladesh’s river basins. In this context, the “Padma Barrage (Phase-I)” project has been approved by the Executive Committee of the National Economic Council (ECNEC). The project, to be implemented from July 2026 to June 2033, includes construction of a 2.1-kilometre main barrage and a hydropower plant at Pangsha in Rajbari. Once completed, the project is expected to enable storage of 2,900 million cubic metres of water, prevent salinity intrusion in the Padma basin including the Sundarbans, support irrigation for 2.88 million hectares of land, and significantly boost agricultural and fish production. The government is also moving ahead with the “Comprehensive Management and Restoration of the Teesta River Project,” commonly known as the Teesta Master Plan, aimed at improving livelihoods in northern Bangladesh.

The Real Estate and Housing Association of Bangladesh (REHAB) has warned that new taxes and duties on construction materials in the proposed 2026-27 national budget will push up construction costs and ultimately raise flat prices, hitting ordinary homebuyers hardest. Reacting to the budget placed by Finance Minister Amir Khosru Mahmud Chowdhury in Parliament on Thursday afternoon, REHAB President Ali Afzal said the proposal fell well short of what the housing sector had expected. "We are still reviewing the budget in detail, but what we have seen so far shows no meaningful policy support or incentives for the housing sector," he said. "On the contrary, new taxes and duties on construction materials are likely to further increase construction costs. The imposition of a specific VAT on steel rods, in particular, will drive up costs and have a direct impact on flat prices and ordinary buyers," he said. Afzal said REHAB had long been pressing for a reduction in flat and land registration costs, arguing that lower registration fees will stimulate real transactions, attract investment to the sector and ultimately boost government revenue, a demand that went unaddressed in this year's budget. He underscored the sector's broader economic footprint, noting that housing is directly and indirectly linked to some 269 industries. A slowdown in real estate, he warned, will not only hurt developers and buyers but also ripple across industries, including steel, cement, ceramics, electrical goods, furniture and transport, putting the livelihoods of hundreds of thousands of workers at risk. "Revitalising the housing sector means revitalising the economy, generating employment and strengthening the foundation of sustainable growth," the REHAB president said, urging the government to give serious weight to their proposals in post-budget consultations. For the sector's long-term health, he called for lower registration costs, housing-friendly tax policies, access to long-term low-interest financing and a stable investment climate. REHAB said it views the budget's provision allowing voluntary disclosure of investment as a positive step, adding that the measure would be reviewed further.