As Finance Minister Amir Khosru Mahmud Chowdhury prepares to place a Tk 9.38 lakh crore budget for FY2026-27 before parliament on Thursday, a number of economists and financial sector experts are urging the government to prioritise economic stabilisation and recovery over ambitious growth targets, arguing that recovery must come before expansion.
Bangladesh's economy is navigating a difficult stretch marked by high inflation, a stressed banking sector, sluggish private investment, and the lingering damage of financial mismanagement and malpractices under the previous Awami League government. Nearly 500 factories shut down during the interim administration, and foreign investment has remained sluggish.
Distinguished Fellow at leading think tank Centre for Policy Dialogue, Dr Mustafizur Rahman, told UNB the budget must address structural weaknesses before chasing growth figures. “Bangladesh's economy has reached a point where stabilisation must come before growth. To stabilise the economy, we need to rethink the banking system, investment infrastructure, and port management. The budget must also lay out a roadmap for the post-LDC graduation era.”
The World Bank and IMF, in their 2026 assessments on Bangladesh, identified high inflation, weak revenue mobilisation, a distressed banking sector, and volatile private investment as the country's primary economic risks, and called for a long-term structural reform plan.
Professor of Economics at the University of Dhaka Rumana Haq warned that flagship social protection programmes, including the government's proposed family card and farmer card schemes cannot succeed without fiscal stability. “These programmes require substantial funding. Without economic stability and good governance, the intended beneficiaries simply won't benefit.”
To finance the budget deficit, the government plans to borrow nearly Tk 2.5 lakh crore, of which around Tk 1.35 lakh crore will come from domestic banks, a heavy reliance that worries financial sector experts.
Chairman of the Investment Corporation of Bangladesh Professor Abu Ahmed stressed the need to develop alternative financing channels. “Without strengthening the equity market and bond market, the budget will not deliver results. The government must pursue asset securitisation and seriously examine why major companies are struggling, or choosing not to do business in Bangladesh.”
The BNP government has set a target of transforming Bangladesh into a $1 trillion economy by 2034. Experts believe this budget should lay the first concrete roadmap toward that goal, but warn the target is unreachable without reducing interest rates and unlocking private sector potential.
Prof Shahidul Islam Zahid, chairman of the Department of Banking and Insurance at DU, said at least 7 percent annual GDP growth is needed to reach the 2034 target of a trillion dollar economy. “With lending rates currently at 15 percent, investment simply won't come. Without investment and private sector engagement, the target is a distant dream. The government must first stabilise the economy and bring interest rates back to a normal level.”
Khondoker Sakhawat Ali, Emeritus Fellow at Unnayan Samonnay, pointed to a deeper crisis: the collapse of public confidence in financial institutions. “Billions have been looted from banks. Every taka belongs to this country's taxpayers. Depositors who cannot access their own money have lost faith in the entire banking system. There is no more alarming signal for an economy than that.”
The economists UNB spoke to for this report broadly agree: the FY2026-27 budget should abandon overambitious projections and focus squarely on pulling the economy back from the brink. A recovery-focused budget this year, they believe, can set the stage for a growth-oriented one next year.