Actual budget deficit may reach Tk 4tn, says research organisaiton RAPID

The NBR has been assigned a revenue collection target of Tk 6.04 trillion, but RAPID expects a shortfall of at least Tk 1 trillion, says its Chairman MA Razzaque

The actual budget deficit may rise to nearly Tk 4 trillion if the BNP government's proposed budget for the fiscal year 2026–27 is fully implemented, says private research organisation Research and Policy Integration for Development (RAPID).

The observation was presented on Thursday morning at the CIRDAP auditorium, where RAPID organised a discussion on the newly announced national budget.

RAPID Chairman MA Razzaque said, "I would like to say that if the government believes it can implement the entire Tk 9.38 trillion budget, then the budget deficit will be much, much higher than the Tk 2.43 trillion deficit projected in the budget."

Explaining his assessment, the economist noted that the National Board of Revenue (NBR) has been assigned a revenue collection target of Tk 6.04 trillion, but RAPID expects a shortfall of at least Tk 1 trillion.

"Even if the government achieves an extraordinary revenue performance this fiscal year (2026–27), we still believe there will be a deficit of around Tk 1trillion compared to the NBR target."

He added that past performance supports this concern.

"You all know the NBR's track record. Every year the government sets ambitious revenue targets in the budget, but the NBR has consistently failed to collect the full amount."

Razzaque also believes the government will fall short of its foreign borrowing targets by about Tk 500 billion.

"We do not think the government will receive all the foreign loans it expects."

"Even under a favourable scenario, we believe there will be a Tk 500 billion shortfall compared to the government's foreign borrowing target."

The proposed budget, announced in parliament on Jun 11, aims to finance the deficit with net foreign borrowing of Tk 1.09 trillion.

Razzaque further said, "We are living in a time when global foreign aid flows are declining at an unprecedented pace."

"In 2023, global foreign aid flows totalled $232 billion. That figure has now fallen to $153 billion."

Razzaque warned that the government's focus on achieving high economic growth without first ensuring economic stability could further fuel inflation, especially when low-income people have already been suffering from high inflation for the past four years.

"The big question before us is whether we are giving too little importance to stabilisation. If we prioritise recovery or growth without adequate emphasis on stabilisation, inflation will not come down, and achieving economic stability will become risky."

He noted that persistent inflation has significantly reduced the real income of ordinary citizens.

"The last poverty survey conducted by the Bangladesh Bureau of Statistics (BBS) was in 2022. Due to prolonged high inflation, many more people have likely fallen below the poverty line since then."

"Economic recovery is important, but it must be built on a foundation of economic stabilisation. Pushing growth too aggressively while inflation remains high may further intensify inflationary pressures."