Budget deficit narrows to 3.6pc of GDP for FY'26

The budget deficit for the fiscal year 2025-26 has been proposed to be narrowed to 3.6 per cent of the country's gross domestic product (GDP) despite rise in the payments of both debt and interest.

"…Our overall budget deficit will remain at a tolerable level. In the proposed budget for FY 2025-26, the deficit will be Tk 2,26,000 crore (Tk2.26 trillion), which will be 3.6 per cent of the GDP," Finance Adviser to the interim government Dr. Salehuddin Ahmed said Monday.

Presenting the national budget, he said although the expenditure on principal and interest payment of foreign loans increased due to the huge depreciation of the Taka against the US dollar during the previous government, the overall budget deficit would be at a tolerable level for the FY'26.

The finance adviser also proposed to revise the budget deficit for the current FY 2024-25 downward to Tk2.26 trillion or 4.1 per cent of the country's GDP.

The budget deficit was originally estimated to be Tk 4.6 per cent (Tk 2.56 trillion) of the GDP for the FY 2024-25, he said in his budget speech.

Of the total deficit in the proposed budget for FY 2024-25, Tk 1.25 trillion would be spent from domestic sources and Tk 1.01 trillion from foreign or external sources.

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