To prop up an economy that narrowly avoided macroeconomic collapse two years ago and is still recovering from political upheaval that toppled a long-standing regime, Finance Minister Amir Khosru Mahmud Chowdhury on Thursday unveiled his first national budget, pitching it as a framework for stability, equity, reconstruction and investment-led growth.
The Tk9.38 lakh crore budget marks a 19 per cent expansion over the previous fiscal year, but also signals a wider deficit path, heightened financing uncertainty and significant implementation risks in an economy where consumers and businesses remain under sustained pressure.
Yet analysts say the fiscal blueprint reflects the political mandate of the new administration and attempts to balance recovery with ambition.
Centre for Policy Dialogue Executive Director Fahmida Khatun said the budget broadly addresses “stability, recovery and reconstruction” needs at a critical juncture.
Economists and entrepreneurs, however, warned that execution will be the decisive constraint. Revenue mobilisation is expected to require an unprecedented near 40 per cent jump to meet targets, while efforts to restrain domestic borrowing, revive external financing flows and strengthen institutional capacity remain key challenges.
Despite concerns, business leaders largely welcomed the policy direction, particularly measures aimed at deregulation, investment facilitation and improving the ease of doing business in an economy long criticised for bureaucratic bottlenecks.
East Coast Group Chairman Azam J Chowdhury described the budget as “a well-thought-out, bold fiscal push the country now needs”, adding that social protection measures were timely amid inflationary pressures on households.
Bangladesh Association of Publicly Listed Companies President Riad Mahmud said the new budget marked a shift in tone. “After many years, we feel a fiscal push beyond rhetoric,” he said, adding that ease of doing business measures appeared more extensive than in previous fiscal plans.
The government’s strategy also seeks to broaden the tax base while maintaining what businesses described as a status quo burden, with promises of future relief contingent on improved compliance and administrative reform.
The budget places emphasis on human capital development through higher education allocations, private sector-led growth and job creation, particularly as policymakers seek to address poverty pressures that deepened after the Ukraine war shock pushed millions into vulnerability.
On the investment facilitation front, the finance minister announced a shift towards mandatory digital processing of licences and approvals. Under the new framework, all agencies will be required to respond within seven days, with non-response treated as automatic approval unless explicitly rejected.
The move, alongside expanded automation of government services, is intended to reduce direct administrative contact and improve investor confidence in a country where approvals often require engagement across multiple offices.
Green transition measures also featured prominently, including duty waivers on solar equipment and incentives for green mobility as Bangladesh attempts to reduce import dependence, strengthen export competitiveness ahead of LDC graduation and address environmental vulnerabilities.
Energy entrepreneur Azam J Chowdhury said the measures reflect long-delayed structural shifts. “These are steps Bangladesh should have taken a decade ago,” he noted.
The budget also targets youth employment and ICT expansion, with significant duty reductions on computers and hardware expected to cut retail prices by 15–20 per cent for some categories, according to traders.
The semiconductor industry’s efforts for a billion-dollar export by 2030 have been backed by cutting their tool import duties to 1 per cent, while startups have been offered a tax and value-added tax waiver for a decade to unlock their potential to innovate and create jobs.
The move is likely to ease access to digital devices after sustained price increases since the pandemic period.
Economist M Masrur Reaz, chairman of Policy Exchange Bangladesh, said the budget’s proposed 1.5 per cent FDI incentive could yield results if regulatory bottlenecks are effectively removed.
Reducing the burden of withholding tax, advance tax on businesses, would help.
The budget also expands social safety net programmes, including family card-based support initiatives, in line with the government’s broader election commitments to strengthen welfare coverage.
However, despite optimism in parts of the private sector, the overarching concern remains whether institutional capacity and revenue performance can match the scale of the fiscal expansion, or whether the ambitious framework risks outpacing implementation reality.
The structural reforms would be key to sustaining the ambition for transformation to remain competitive after LDC graduation, improving fiscal strength to enter a virtuous cycle, said Masrur Reaz.
Dependence on indirect tax that hurt the poor most, remained a key problem that the government should address, he added.
Business leaders cautioned that the credibility of the reform agenda will depend entirely on delivery, not announcement, as past initiatives often faltered amid bureaucratic complexity and poor execution.
Delivery of the reforms being discussed will be the acid test in gaining investor confidence and implementing the budget, said Humayun Rashid, former president of the International Business Forum of Bangladesh.
He added that while the proposed budget offers some rational relief for industries and signals stronger facilitation for exporters, structural constraints continue to weigh on the outlook. The prevailing energy crisis and a rising financial burden, he said, remain persistent challenges for businesses already operating under tight margins.
