Fragile economy poses major burden for govt
Muhammad Ayub Ali :
The newly elected Bangladesh Nationalist Party (BNP) government faces a daunting economic landscape, with rising debt, sluggish revenue growth, banking vulnerabilities, and an overstretched treasury compounded by ambitious election promises.
When the BNP assumed power on February 17, it inherited a public debt exceeding Tk 23 lakh crore. The party’s election manifesto includes costly commitments such as family cards for five crore households, farmer cards for genuine farmers, job creation programs, and gradual debt reduction.
Only way to spend more without borrowing is by boosting revenue—but revenue growth is already lagging behind rising expenditure. Raising taxes to increase income would further burden the public, leaving the government in a tight spot.
Dr Zahid Hussain is a former lead economist of the World Bank’s Dhaka office told The New Nation that the government has minimal scope to increase spending, with only limited savings in development projects, growing power sector arrears, and higher costs from political commitments and proposed salary increases.
What lies in the BNP manifesto?
In its election manifesto, the Bangladesh Nationalist Party (BNP) promised family cards for five crore households—now set to be piloted in 13 upazilas with Tk 2,000 per card.
Apart from this, farmer cards for genuine farmers, job creation, and a gradual reduction of the national debt, commitments that have intensified pressure on the current government.
According to, finance department data, total government expenditure during the first six months of the fiscal year amounted to Tk 258,186 crore, with Tk 220,463 crore spent on operational activities and Tk 31,841 crore directed to the development sector
During the same period, revenue earnings totaled Tk 222,853 crore, leaving a budget shortfall of Tk 35,333 crore, the government borrowed Tk 33,340 crore to cover the gap between spending and income.
Defaulted loans have risen to 34.6 percent of total credit—the highest level since 2000 with over Tk 4 lakh crore tied up in 2.22 lakh court cases, intensifying pressure on both the banking sector and the broader economy.
In this context, increasing government revenue through the National Board of Revenue (NBR) has become essential.
Over the past 15 years under the Awami League government, the national budget expanded each year despite persistent revenue shortfalls, leading to widening deficits financed through domestic and foreign borrowing.
As a result, the country’s overall debt stock and interest obligations continued to climb.
According to a recent report by the International Monetary Fund (IMF), Bangladesh is set to repay $30.58 billion in domestic and external debt in the 2025–26 fiscal year, equivalent to approximately Tk 3.73 lakh crore at an exchange rate of Tk 122 per dollar.
The IMF projects that debt repayments will rise further to $33.84 billion in 2026–27, underlining growing pressure on public finances and the urgent need to boost revenue collection.
