The Centre for Policy Dialogue (CPD) has raised serious concerns over the government’s ambitious plan to create one crore new jobs over the next 18 months, citing weak investor confidence and a slowdown in private-sector credit.
The think tank also cautioned that the success of the proposed 2026-27 national budget will depend more on the quality of its implementation than on its size.
At a media briefing on Friday titled “National Budget 2026–27: CPD Review” in Gulshan, CPD Executive Director Fahmida Khatun assessed the Tk9.38 lakh crore budget, the largest in Bangladesh’s history, presented a day earlier by Finance Minister Amir Khosru Mahmud Chowdhury.
Fahmida Khatun highlighted that the first budget of the current government arrives amid multiple economic challenges, including high inflation, sluggish growth, weak private investment, limited job opportunities, revenue shortfalls, and a fragile banking sector.
The government has set a GDP growth target of 6.5 per cent for the next fiscal year, aiming to raise private-sector investment to 21.3 per cent of GDP and public investment to 13 per cent.
In line with election promises, it also plans to generate one crore new jobs in the next 18 months.
Investment climate falls short of ambition.
Despite these targets, CPD notes that the necessary investment environment has yet to materialise. “Private-sector credit growth was only 4.75 per cent as of April this year.
Investors are hesitant due to economic uncertainty,” Fahmida Khatun said.
She emphasided that fiscal incentives alone are insufficient, calling for economic stability, a business-friendly environment, and accessible financing to stimulate investment.
CPD’s analysis shows that to cover the budget deficit, the government plans to borrow nearly Tk1.12 lakh crore from banks, in addition to securing about Tk1.0985 lakh crore from foreign loans and grants.
Fahmida warned that excessive government borrowing from banks could lead to a liquidity crisis for the private sector, making it difficult for entrepreneurs to secure loans and potentially driving up interest rates.
She noted that this trend, coupled with current contractionary monetary policies intended to control inflation, could further discourage private investment, despite the budget’s stated philosophy of private-sector-led growth.
Fiscal targets and implementation risks
Taufiqul Islam Khan, CPD research director, noted that private-sector credit growth is projected to rise to 9.4 per cent next year, but achieving this under current conditions will be challenging without improving the business environment.
CPD Distinguished Fellow Dr Mustafizur Rahman questioned the foundations of the budget’s export growth and inflation targets, noting that inflation remains above 9 per cent while export growth is currently negative.
He further described the 18 to 30 per cent revenue collection growth target as “extremely challenging,” given the historical data of the last decade. He warned that if revenue fails to meet expectations while spending remains unchanged, dependence on internal and external debt will increase.
SMEs face increased pressure
The review also highlighted that while large industries receive various incentives, CPD researcher Tamim Ahmed said small and medium enterprises (SMEs) are facing new pressures as the government seeks to expand the tax net through increased monitoring of smaller businesses.
Debt must be productively utilised
Regarding the national debt, which currently stands at 38.2 per cent of GDP, Dr Fahmida remarked that while it has not reached a risky international level, the pressure of interest payments is rising. She emphasised that debt is only beneficial if invested in productive sectors to create jobs and stimulate the economy; otherwise, it becomes a future burden.
Implementation will decide success
CPD emphasised that the budget’s impact depends on execution, not its size. The think tank stressed the need for institutional reforms, skill development, and good governance to realise targets for private-sector investment, job creation, and sustainable growth.
Mostafizur Rahman concluded, “The policies and priorities are good, but success ultimately hinges on implementation.”
