The Centre for Policy Dialogue (CPD) on Friday said that almost all the important macroeconomic targets set in the proposed FY27 budget were facing a tough reality test.
Major challenges remain in all areas, be it growth, investment, revenue collection, inflation control, export expansion, or employment.
According to CPD, the first budget of the new government has come at a time when the country's economy has not yet fully recovered from the accumulated crisis of several years. High inflation, stagnant investment, weakness in the banking sector, shortfall in revenue collection, energy crisis, and limited employment opportunities have put pressure on the economy.
CPD executive director Fahmida Khatun made these observations at a press conference titled “National Budget 2026-27: CPD Review” held in the capital.
The organization's distinguished fellow Prof Mostafizur Rahman, research director Khandaker Golam Moazzem, senior research assistant Tamim Ahmed, and other researchers were also present.
The government has set a GDP growth target of 6.5% for FY27. But according to CPD, the path to achieving this target is not easy at all as economic activities have not gained the expected momentum in the current fiscal.
The think tank said that to increase growth, investment in the productive sector must be increased, power and energy supply must be ensured, business confidence must be restored and the banking sector must be stabilized.
According to the CPD, tightening monetary policy alone will not reduce inflation. For this, it is necessary to improve the food supply system, ensure discipline in market management, increase agricultural production, keep import supply running, and ensure stability in the energy sector. Otherwise, it will be difficult to achieve the inflation target.
The organization believes that failing to control inflation will harm almost all the budget targets.
Special emphasis has been given in the budget to increase private investment. But CPD's analysis says that currently, businessmen are facing various uncertainties. High interest rates, difficulties in obtaining bank loans, instability in the dollar market, energy crisis and policy uncertainty have become major obstacles to new investments.
According to CPD, it is not possible to increase investment only through tax breaks or incentives. It is important to restore confidence among investors, ensure policy continuity and reduce the cost of doing business. At the same time, effective initiatives are also needed to attract foreign investment.
Revenue collection target ‘ambitious’
The proposed budget has set a revenue collection target of Tk695,000 crore. But CPD says that this target is very ambitious when compared to the revenue collection trend seen in recent years.
According to the organization, revenue collection has been lagging behind expectations for a long time due to structural weaknesses of the National Board of Revenue (NBR), tax evasion, limited tax net and administrative inefficiency.
However, CPD sees the initiatives of expanding the tax net, linking tax information with national identity cards, making TIN mandatory for opening bank accounts, and data-based tax administration as positive.
One of the areas of concern for CPD is the government's dependence on bank loans to finance the budget deficit. If the government's borrowing increases, there is a risk of credit flow to the private sector contracting.
The research organization believes that the banking sector is still suffering from defaulted loans, liquidity crisis, and lack of good governance. In such a situation, the government's excessive borrowing can have a negative impact on private investment.
According to CPD, although the target of increasing export growth has been set, the global market situation is still uncertain. The slowdown in the global economy, increased trade competition, and challenges after Bangladesh's LDC transition are major risks for the export sector.
The organization also believes that there is a lack of a clear action plan in the budget regarding job creation. Although a large number of young people enter the labor market every year in the country, there are relatively few new job opportunities.
However, CPD also highlighted some positive aspects of the budget.
The organization considers the five-year roadmap for the tax structure, incentives for filing tax returns, digitalization of tax administration, expansion of bond facilities for export-oriented industries, tax benefits for startups and freelancers, and increased allocation to the health sector as positive steps.