FY27 budget promising in direction but faces tough implementation test: RAPID
Our corporate tax rate still 27%, while Vietnam stands at 20%
Highlights:
Experts' take on budget:
- Budget deficit figure of Tk2,43,000cr may be an understatement
- Actual FY27 financing gap could be close to Tk4,00,000 crore
- Budget that expands spending without credible revenue mobilisation can –
- Prolong inflation
- Crowd out private investment
- Weaken reserves
- Delay a durable recovery
- Bangladesh's logistics costs are among the highest in the world
Bangladesh's national budget for FY27 signals meaningful reform ambition but confronts serious macroeconomic strains and institutional risks that could undermine its delivery, economists and business leaders warned at a policy dialogue today (18 June).
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Research and Policy Integration for Development (RAPID) organised the post-budget dialogue titled "Budget FY27: Reform Signals, Macroeconomic Strains and Implementation Risks" at CIRDAP auditorium in Dhaka.
Presenting the keynote speech, RAPID Chairman Mohammad Abdur Razzaque acknowledged several positive features of the budget, including the 3R framework of recovery, restoration and reconstruction, the medium-term commitments on health, education and social protection spending, and business facilitation measures such as treating withholding tax as advance income tax.
However, he cautioned that the official budget deficit may significantly understate the actual financing gap.
"The headline deficit of Tk2,43,000 crore may be misleading; under plausible assumptions, the actual FY27 financing gap could be close to Tk4,00,000 crore," he said, pointing to likely NBR revenue shortfalls of around Tk1,00,000 crore and external financing risks given sharply declining global aid flows.
"A budget that expands spending without credible revenue mobilisation and prudent borrowing can prolong inflation, crowd out private investment, weaken reserves, and delay a durable recovery."
Razzaque also pushed back against the budget's emphasis on aggressive growth targets, arguing that macroeconomic stabilisation must come first.
"Recovery is necessary, but it must be built on stabilisation. A budget that expands spending without credible revenue mobilisation and prudent borrowing can prolong inflation, crowd out private investment, weaken reserves, and delay a durable recovery," he said.
Apex Footwear Managing Director Syed Nasim Manzur praised the budget's inclusion of deregulation and accountability-focused language but raised concerns about structural inconsistencies.
"Our corporate tax rate is still 27% while Vietnam stands at 20%. If we truly want to attract investment, we need at least an announced glide path to bring this down," he said.
Bangladesh's logistics costs are among the highest in the world, and climate shocks are making the situation worse. Businesses urgently need covered warehouse facilities and stronger logistics infrastructure to protect supply chains, Manzur added.
The panel also featured Rubana Huq, vice-chancellor of the Asian University for Women, and Ms Taslima Akhter, president of Bangladesh Garment Workers Solidarity, who shared perspectives on labour, gender and implementation capacity.
