Skills gap looms as education budget falls

Public expenditure on education in Bangladesh has dropped to around 1.7 per cent of GDP, significantly below international recommendations, raising concerns about the country’s future human capital development.

The findings were presented by Towfiqul Islam Khan, Additional Director (Research) at the Centre for Policy Dialogue (CPD), during an event organised by the Citizens’ Platform for SDGs, Bangladesh, titled “Education for Tomorrow in Light of the Election Manifesto: New Thinking, New Structure and New Initiatives.”

The analysis shows that actual utilisation of education spending fell further to approximately 1.3 per cent of GDP in FY2025, well below the 4–6 per cent benchmark recommended by UNESCO.

Although government policy documents have long recognised education as a national priority, the study notes that budgetary ambitions have weakened over time.

The Sixth Five-Year Plan had targeted raising education spending to 4 per cent of GDP by 2015. Subsequent policy frameworks delayed this goal, with the current Perspective Plan now setting the 4 per cent target for 2041.

The report identifies limited fiscal space and weak revenue mobilisation as key obstacles to increasing public investment in education.

Bangladesh’s tax-to-GDP ratio stood at just 6.8 per cent in FY2025, one of the lowest in the region, constraining the government’s capacity to expand education funding.

The study also found that development expenditure in the education sector has fallen sharply in recent years, while operating expenditure now dominates the budget structure.

To strengthen the education system, the report recommends enhanced domestic resource mobilisation, improved spending efficiency, and better programme management.

It proposes gradually increasing education spending to around 5 per cent of GDP by 2031 through more effective budget execution and enhanced revenue mobilisation.

The analysis warns that without significantly higher investment in education, Bangladesh may struggle to develop the skilled workforce required to meet the demands of a rapidly changing labour market.