Prime Minister Tarique Rahman has ordered the formulation of a "people-oriented" national budget with sweeping measures to ease the burden on ordinary citizens amid mounting inflationary pressures, economic fragility and rising global uncertainty.
In a high-level meeting with Finance Minister Amir Khasru Mahmud Chowdhury on Wednesday night, the Prime Minister directed the Finance Ministry to place public welfare, election pledges and social protection at the centre of the proposed Tk 9.3 trillion budget for the 2026-27 fiscal year, officials familiar with the discussions said.
The instructions came as the government faces growing economic strain driven by stubborn inflation, slowing revenue collection, pressure on foreign exchange reserves and uncertainty triggered by the ongoing US-Iran conflict and volatile global energy markets.
According to Finance Division officials, the Prime Minister instructed the ministry to prepare an education- and healthcare-focused budget with allocations equivalent to at least 5 per cent of gross domestic product (GDP), marking one of the strongest policy signals yet from the new administration on social-sector spending.
He also ordered strict transparency in project expenditures, greater austerity in public spending and urgent measures to stabilise the fragile economy and contain soaring living costs that continue to squeeze households across the country.
The Prime Minister further emphasised enhanced support for agriculture and expansion of social safety net programmes to shield vulnerable groups from deepening economic hardship.
Officials involved in the budget process admitted that the government is racing against time as major fiscal frameworks remain unresolved less than a month before the national budget is scheduled to be unveiled in parliament.
"The Annual Development Programme has not yet been finalised. Revenue targets, deficit financing and tax restructuring are still under discussion," a senior Finance Ministry official said.
"The global economic situation is changing so rapidly that the government is repeatedly being forced to revise its calculations and priorities."
The escalating conflict between the United States and Iran has emerged as a major concern for policymakers, raising fears over fuel prices, import costs and external financing risks.
Officials said the uncertainty surrounding US President Donald Trump's shifting trade and foreign policies is also complicating Bangladesh's economic planning.
At the same time, the government is struggling to balance demands for a new public-sector pay scale, financing ongoing mega projects and approving fresh development schemes while facing widening fiscal pressure.
Finance Ministry insiders described tax reform as the biggest challenge confronting the government ahead of the budget announcement.
"The government is yet to determine how the tax net can be expanded without triggering public dissatisfaction," an official said.
However, Prime Minister Tarique Rahman reportedly instructed policymakers to broaden the tax base carefully while ensuring that the budget does not contradict the ruling party's election commitments.
According to preliminary estimates, the proposed national budget for FY2026-27 may reach Tk 930,000 crore, sharply higher than the Tk 790,000 crore budget for the current fiscal year.
Economists say the jump reflects the government's attempt to revive spending after the previous interim administration announced a comparatively smaller austerity-driven budget amid political instability and economic turmoil.
Yet officials privately acknowledge that even the reduced current budget has faced serious implementation challenges due to weak revenue mobilisation and sluggish economic activity.
The upcoming budget is expected to carry a record deficit, with the government targeting Tk 695,000 crore in revenue collection while relying heavily on domestic and foreign borrowing to bridge the financing gap.
Finance Ministry estimates show plans to secure Tk 110,000 crore in foreign loans and Tk 119,000 crore from domestic sources. Authorities are also preparing an additional Tk 44,000 crore in budget support borrowing in anticipation of possible revenue shortfalls.
