The proposed budget for Bangladesh’s 2025-26 fiscal year, presented by Finance Adviser Dr Salehuddin Ahmed on June 2, 2025, reflects a realistic approach to addressing the country’s multifaceted economic challenges, according to Dr Selim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM).

However, it falls short in delivering structural reforms needed for transformative change, he said.

Selim Raihan commended the budget’s realistic tone and its acknowledgment of critical issues such as inflation, unemployment, stagnant investment, and inequality.

The budget aims to serve as a tool for economic restructuring, responding partially to demands for reducing inequality and boosting employment raised during the July–August 2024 student protests, he said.

However, Raihan highlighted several shortcomings:

Limited structural reforms:

The budget adheres to the framework of previous years, with inadequate focus on long-standing issues like weak revenue collection, inefficient public spending, and delays in project implementation.

Key sectors such as education, health, and social protection lack sufficient funding and structural shifts, limiting their impact.

Institutional reforms and accountability mechanisms for effective resource utilization are absent, reducing the likelihood of meaningful outcomes.

Investment and employment:

While the budget outlines plans to boost investment and employment, it lacks concrete policy guarantees or a clear roadmap to create an investment-friendly environment.

Critical areas like tax reform, formalization of the economy, infrastructure development, and legal certainty remain unaddressed, undermining investor confidence.

Implementation challenges:

The budget fails to provide a clear direction for enhancing ministerial capacity, improving project planning and execution, or ensuring spending transparency.

This results in the budget appearing as a numbers-based exercise rather than a vehicle for structural transformation.

Broader implications

Selim Raihan raised a critical question: Will the interim government prioritize addressing deep-rooted economic challenges, or will it remain preoccupied with political instability? The uncertainty surrounding elections and ongoing political deadlock are already straining public trust. Without urgent action to tackle employment, investment, inflation, and inequality, the budget risks becoming a routine annual exercise rather than a catalyst for change.

Call to action

Selim Raihan urged the government to balance economic reforms with political crisis management. Failure to seize this opportunity could further erode public confidence, leaving the budget as a missed chance for meaningful economic transformation.