Assessment on: National Budget Forecast for FY 2025-26 & 2026-27

Course Title: Public Finance

Prepared By Prepared For

The budget is a central policy document of government, showing how it will prioritize
and achieve its annual and multi-annual objectives. Apart from financing new and
existing programs, the budget is the primary instrument for implementing fiscal policy
and thereby influencing the economy as a whole. Alongside other instruments of
government policy - such as laws, regulation and joint action with other actors in
society the budget aims to turn plans and aspirations into reality. More than this, the
budget is a contract between citizens and state, showing how resources are raised and
allocated for the delivery of public services. Such a document must be clear,
transparent and credible if it is to command trust, and to serve as a basis of
accountability.

While a government's budget directly or indirectly affects the lives of every one of its
citizens, it can have the greatest impact on certain groups, such as the elderly,
children, the poor, rural residents, and minorities. The wellbeing and prospects of
these people can hinge greatly upon government decisions on raising and spending
money. Budget cuts tend to have the greatest impact on programs that benefit the poor
and vulnerable, as other items, such as interest on the debt, the public-sector wage bill,
or military expenditures, are more likely to have first claim on scarce funds.
Budget Overview of Last Five Years

Over the past five years, Bangladesh's government had a combined budget of Tk.
3,408,530 crores, with an average yearly budget of Tk. 681,706 crores. Each year's
budget had showed an increase compared to the previous year; among them current
year's budget is the highest with 797,000.
Bangladesh’s budget is distributed to 61 ministries and divisions. Among them, there
are eleven most prominent ministries, they receive more than 70% allocations of the
total budget.
These ministries /divisions are:
• Finance Division
• Ministry of Defense
• Public Security Division
• Education ministers (such as the Ministry of Primary and Mass Education,
Secondary and Higher Education Division)
• Health Service Division
• Local Government Division
• Ministry of Agriculture
• Power Division
• ADP division (Road Transport and Highways Division, Ministry of Railway)
Over the last five years, the average allocation for these sectors was 73.77% of the
overall budget.

Ministry/Division Average Allocation (2020-2025)

Finance Division 28.64%

Ministry of Defense 5.83%

Public Security Division 3.64%

Ministry of Primary and Mass Education 4.57%

Secondary and Higher Education Division 5.79%

Local Government Division 6.16%

Ministry of Agriculture 3.14%

Road Transport and Highways Division 5.21%

Ministry of Railway 2.66%

Power Division 4.05%

Other Ministries 26.23%

This exhibits the average allocation of the budget to various ministries/divisions in

➢ The Finance Division has received the highest allocation of the total budget,
with 28.64%, Also gradually increasing each year and reaching 31.43% in the
current year, showing a greater focus on handling financial resources, public
debt, and economic programs.
➢ The Local Government Division has a significant budget with an average of
6.16% of the total allocation. However, continuing to decrease and obtain
5.67% this year, reflecting efforts to cut decentralized governance, urban
development, and rural infrastructure.
➢ For both the Defense and Public Security Divisions average portion was 5.83%
and 3.64%. While 5.3% and 3.3% are in the current year, highlighting lower
funding for national security, law enforcement, and internal order than in
previous years.
➢ The education sector obtained significant focus, with 4.57% for Primary and
Mass Education and 5.79% for Secondary and Higher Education, highlighting
the government’s commitment to both basic and advanced education with
higher funding than previous years.
➢ Over the year 2020-25, the Health Service Division received 3.8% in average,
less than the 4.06% it obtained previous year. This indicates that the rising
 demand for healthcare systems and services may be met given flexibility for
expansion to match the expanding population.
➢ Roads and highways received 5.21% of the funds; railway received 2.66%. For
infrastructure and mobility, this was the expected level. Growth in other areas
has been faster than that of trains and roads; both have dropped from 5.23%
and 2.50% in FY 2023–2024 to 4.78% and 2.2% this year.
➢ From an average of 4.05% over the past five years, the allocation of the Power
Division declined this year to 3.67%. To solve the current issue, more money
should thus be allocated to power generation and delivery.
➢ The average allocation for The Ministry of Agriculture was 3.14% while
funding has increased this year and risen to 3.45% indicating support for the
agricultural sector is boosting to ensure enough food production, food security,
and price stability.
➢ Lastly, for all Other remaining Ministries budget allocation was 26.23%,
representing allocations to many smaller or less prominent ministries.
Budget Forecast FY2025-26

In July, the Previous government had passed Tk. 7,97,000 crore national budget for
the 2024-25 fiscal year. Due to higher inflation, political and economic instability,
lower revenue regeneration, raised interest payments, and increased subsidies, the new
interim government decided to reduce Tk. 50,000 crore from the current year budget.
According to many economists and officials of finance ministry, For the fiscal year
2025-26 national budget, the interim government is planning to focus on inflation
control, financial stability, and social progress, while prioritizing crucial areas and
reforming non-essential spending.
The National Budget will be decreased significantly no loans will be taken from
internal banks system. The government will not any undertaken mega-project. Instead,
the budget would focus on improving the health, education, power, and energy
sectors. Also, canceling politically motivated and underfunded projects of the former
government will reduce development expenditure. While prioritizing innovation-
driven and human resource development projects.
Inflation control would be the top priority of the upcoming budget, Inflation was
10.87% in October, which is the highest in recent months. Food inflation specifically
rose to 12.66%. To encounter inflation, the budget will include measures to boost the
supply of goods, facilitate production and imports, and provide incentives for the
agriculture and industrial sectors to increase employment and food supply. While,
promoting social safety-net programs to provide relief for low-income groups,
ensuring additional support for income-generating initiatives.
Essential financial sectors will be reformed to address non-performing and default
loans and liquidity crises of banks.
Also, taking initiatives to increase loans for small and medium enterprises (SMEs),
while the government aims to reduce borrowing from the internal banking system as
they are already in a liquidity crisis.
To encourage foreign investment, the government will propose tax exemptions and
incentives, especially in renewable energy.
Finally, Due to the current conflict with neighboring countries, the budget would be
prioritized increasing the military defense budget.

Ministry/Division Budget 2025-26 Budget 2024-25

President’s Office 28.5 33

National Parliament 294.94 347

Prime Minister’s Office 3,910 4,600

Cabinet Division 103.7 122

Supreme Court 223.2 248

Election Commission Secretariat 1,230 1,230

Ministry of Public Administration 4,654.56 5,377

Bangladesh Public Service Commission 149 166

Finance Division 231,299 248,205

Office of the Comptroller and Auditor General of Bangladesh 260 290

Internal Resources Division 3,215 3,217

Financial Institutions Division 3,300 3,418

Economic Relations Division 20,000 21,308

Planning Division 6,000 6,492

Implementation Monitoring & Evaluation Division 180 195

Statistics and Informatics Division 650 662

Ministry of Commerce 900 932

Ministry of Foreign Affairs 1,690 1,726

Ministry of Defense 46,546.50 42,315

Armed Forces Division 50.6 46

Law and Justice Division 1,900 2,022

Public Security Division 29,564.50 26,877

Legislative and Parliamentary Affairs Division 40 45

Ministry of Primary and Mass Education 44,641.80 38,819

Secondary and Higher Education Division 50,724 44,108

Ministry of Science and Technology 14,251.65 13,573

Health Service Division 34,643.75 30,125

Information and Communication Technology Division 2,700 2,872

Ministry of Social Welfare 13,126.38 12,869

Ministry of Women and Children Affairs 5,000 5,222

Ministry of Labour and Employment 486.16 463

Ministry of Information 997 1,108

Ministry of Cultural Affairs 700 779

Ministry of Religious Affairs 2,500 2,602

Ministry of Youth and Sports 2,225 2,212

Local Government Division 44,000 45,206

Rural Government and Co-operatives Division 1,300 1,346

Ministry of Industries 2,635 2,510

Ministry of Expatriates Welfare and Overseas Employment 1,230 1,217

Ministry of Textiles and Jute 602 574

Energy and Mineral Resources Division 1,141 1,087

Ministry of Agriculture 29,118 27,214

Ministry of Fisheries and Livestock 4,000 4,288

Ministry of Environment, Forest and Climate Change 2,000 2,130

Ministry of Land 1,900 2,505

Ministry of Water Resources 10,000 11,194

Ministry of Food 7,094.85 6,757

Ministry of Disaster Management and Relief 11,105 11,003

Road Transport and Highways Division 28,607 38,143

Ministry of Railway 16,264 18,072

Ministry of Shipping 11,300 11,270

Ministry of Civil Aviation and Tourism 5,500 5,695

Posts and Telecommunications Division 2,000 2,420

Ministry of Chittagong Hill Tracts Affairs 1,200 1,400

Power Division 32,153 29,230

Ministry of Liberation War Affairs 7,200 7,474

Anti Corruption Commission 180 191

Bridges Division 6,220 7,318

Technical and Madrasha Education Division 12,372 11,783

Security Services Division 4,426 4,137

Health Education and Family Welfare Division 11,282 11,282

Total 789465.09 797,000

The whole budget for the upcoming year would be Tk. 789,465 crore, which is Tk.
7,535 crore lower than the current year.
As, Interim is promising to provide enhanced health, education, power, and energy
sectors. That's why our assumed budget would increase by 15% in primary,
secondary, and higher secondary education, and similarity 7% in the technical and
madrasaha education divisions. The health services division will have a 15% gain as
the existing public health sector is unable to treat the growing population.
The upcoming budget will focus on controlling inflation mainly food inflation, the
agriculture ministry’s budget will grow by 7%, and 5% in the food and industries
ministries. Due to the interim government, there would be no new mega-project.
Therefore, budget allocation for the ADP sectors will be reduced by 25% in the Road
Transport and Highways Division, 10% in the Ministry of Railway, and 15% Bridges
Division.
On the contrary, the growth will be in the Power Division by 10% and 5% in the
Energy and Mineral Resources Division, due to the power supply crisis in many
industries lead inefficiency and less productivity. Lastly, due to some external and
internal security challenges, the Ministry of Defense budget would increase by 10%
and 7% in the Security Services Division.

Budget Forecast FY2026-27

Budget 2026-27
Ministry/Division Budget 2025-26 (Forecast)
President’s Office 28.5 27
National Parliament 294.94 280
Prime Minister’s Office 3,910 3,700
Cabinet Division 103.7 100
Supreme Court 223.2 215
Election Commission Secretariat 1,230 1,230
Ministry of Public Administration 4,654.56 4,500
Bangladesh Public Service Commission 149 145
Finance Division 231,299 225,000
Office of the Comptroller and Auditor General of Bangladesh 260 250
Internal Resources Division 3,215 3,200
Financial Institutions Division 3,300 3,250
Economic Relations Division 20,000 19,500
Planning Division 6,000 5,800
Implementation Monitoring & Evaluation Division 180 175
Statistics and Informatics Division 650 640
Ministry of Commerce 900 880
Ministry of Foreign Affairs 1,690 1,650
Ministry of Defense 46,546.50 48,000
Armed Forces Division 50.6 52
Law and Justice Division 1,900 1,850
Public Security Division 29,564.50 30,500
Legislative and Parliamentary Affairs Division 40 39
Ministry of Primary and Mass Education 44,641.80 46,000
Secondary and Higher Education Division 50,724 52,000
Ministry of Science and Technology 14,251.65 14,500
Health Service Division 34,643.75 36,000
Information and Communication Technology Division 2,700 2,650
Ministry of Social Welfare 13,126.38 13,300
Ministry of Women and Children Affairs 5,000 4,900
Ministry of Labour and Employment 486.16 490
Ministry of Housing and Public Works 6,450 6,300
Ministry of Information 997 980
Ministry of Cultural Affairs 700 680
Ministry of Religious Affairs 2,500 2,450
Ministry of Youth and Sports 2,225 2,250
Local Government Division 44,000 43,000
Rural Government and Co-operatives Division 1,300 1,280
Ministry of Industries 2,635 2,650
Ministry of Expatriates Welfare and Overseas Employment 1,230 1,235
Ministry of Textiles and Jute 602 610
Energy and Mineral Resources Division 1,141 1,150
Ministry of Agriculture 29,118 30,000
Ministry of Fisheries and Livestock 4,000 3,900
Ministry of Environment, Forest and Climate Change 2,000 1,950
Ministry of Land 1,900 1,800
Ministry of Water Resources 10,000 9,800
Ministry of Food 7,094.85 7,200
Ministry of Disaster Management and Relief 11,105 11,150
Road Transport and Highways Division 28,607 27,000
Ministry of Railway 16,264 15,800
Ministry of Shipping 11,300 11,350
Ministry of Civil Aviation and Tourism 5,500 5,400
Posts and Telecommunications Division 2,000 1,900
Ministry of Chittagong Hill Tracts Affairs 1,200 1,150
Power Division 32,153 33,000
Ministry of Liberation War Affairs 7,200 7,100
Anti Corruption Commission 180 175
Bridges Division 6,220 6,000
Technical and Madrasha Education Division 12,372 12,500
Security Services Division 4,426 4,500
Health Education and Family Welfare Division 11,282 11,282
Total 789,465.09 778,000

It is unclear what the budget for 2026–27 is expected to resemble. Some departments will
receive a lower allocation, while others will receive a higher allocation. This demonstrates the
government's evolving objectives and the most effective allocation of its resources.

The Prime Minister's Office, the National Parliament, and the President's Office are among
the departments that are expected to experience budget adjustments. This suggests that the
focus will continue to be on efficiency, the simplification of processes, and the potential
assignment of certain tasks to reduce overall expenses.

However, it is probable that additional funding will be allocated to critical sectors, including
education, healthcare, defense, and technology. This illustrates the government's commitment
to advancing technology, fortifying national security, enhancing healthcare, and investing in
the well-being of its citizens. The budget increase for education is likely to increase the
literacy rate, facilitate the acquisition of a high-quality education at all levels, and allow
individuals to acquire new skills to satisfy the needs of a developing economy. For example,
the surplus funds could be allocated to addressing public health concerns in the medical field,
enhancing the accessibility of services, and upgrading healthcare facilities.

Most likely, the intended increase in the defense budget will be determined by the
government's response to security concerns in the region and its commitment to modernize
the armed forces. This may involve the acquisition of new equipment, the improvement of
existing systems, and the provision of additional training to employees. Similarly, increasing
public safety budgets could contribute to the enhancement of crime prevention methods, the
reinforcement of law enforcement, and the assurance of national security within the country.

The ministries of foreign affairs and commerce are also expected to prioritize the
development of trade, the attraction of international investment, and the reinforcement of
relations between nations in their respective budgets. In order to achieve this, it is possible to
enhance exports, improve diplomatic relations with other countries, and alter the status of
business through policy.

All things considered, the proposed budget for 2026–27 prioritizes education, health care,
defense, and technology. In the same vein, other departments are directed to optimize their
resource utilization. This budget allocation plan may have as its objectives the fulfillment of
substantial development demands, the stimulation of economic growth, and the enhancement
of national security.
Appendix

• https://1drv.ms/x/c/b9349ffad1110963/EQEtvxZzkBZPjb6vXlkmr6ABrhxbqXluftSnZ
pu5kLUR3A

References

• https://www.tbsnews.net/economy/government-plans-escalate-recurrent-expenditure-
95-2025-26-824821?amp
• https://www.thedailystar.net/business/economy/news/revised-budget-may-be-tk-
50000cr-smaller-3770641
• https://www.thedailystar.net/business/bangladesh-national-budget-fy2024-
25/news/whats-the-new-budget-3628756
• https://www.tbsnews.net/economy/govt-focus-inflation-control-financial-stability-
fy26-budget-1005851?amp
• https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/e3f239dc_f58
1_47c7_a32f_c18b075e0697/2024-25_Budget_Speech_English.pdf