Staff Reporter :
Bangladesh continues to lag behind its least developed country (LDC) graduating peers in both public spending and revenue mobilisation, with its fiscal deficit projected to remain above 4 percent of GDP through 2026.
Despite increasing development demands, the country allocates a relatively low share of its GDP to public expenditure compared to South and Southeast Asian counterparts. In 2025, Bangladesh’s public spending stood at just 13.0 percent of GDP-far below Nepal’s 23.4 percent, Lao PDR’s 18.4 percent, and Cambodia’s 17.9 percent.
This trend is expected to persist in 2026, with Bangladesh’s spending projected to reach only 14.0 percent of GDP.
Revenue mobilisation also remains one of the weakest in the region. By 2026, government revenue is forecast to rise marginally to 9.8 percent of GDP-well below the levels observed in countries with similar or even lower income levels.
While public debt is increasing gradually, it remains moderate by regional standards. Bangladesh’s debt-to-GDP ratio is projected to reach 40.7 percent by 2026, up from 37.9 percent in 2022.
Economists generally consider the debt trajectory sustainable but stress that expanding borrowing capacity will depend on meaningful improvements in tax collection and more efficient public investment.
