Business leaders and economists have underscored the need to ensure access to low-cost financing and reliable energy supplies to revive the manufacturing sector growth, warning that persistent structural weaknesses could undermine the implementation of the proposed national budget for FY2026-27.
They cautioned that ambitious revenue mobilisation and foreign aid targets are unlikely to be met, warning that increased government borrowing from banks to finance the deficit could crowd out private sector credit.
Dr M Masrur Reaz, Chairman and Founder of Policy Exchange Bangladesh, Dr Mohammad Abdur Razzaque, Chairman, Research and Policy Integration for Development (RAPID), Mir Nasir Hossain, former President, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), and Kamran T. Rahman, President, Metropolitan Chamber of Commerce and Industry (MCCI) spoke, among others.
In his welcome remarks, BCI President Anwar-ul Alam Chowdhury Parvez said the economy is witnessing a slowdown in key indicators, including private-sector credit growth, manufacturing output and imports of capital machinery, reflecting weakening investment sentiment in the industrial sector.
He noted that private-sector credit growth has slowed sharply, while manufacturing expansion has weakened compared to previous years.
"Manufacturing growth has slowed significantly, and private-sector credit growth has come down to a much lower level compared to earlier double-digit expansion," he said.
The BCI President further said capital machinery imports had dropped to around $1.4 billion in the January-March period, down from about $5 billion in earlier years, while raw material imports also declined, signalling subdued investment activity.
While appreciating several positive aspects of the budget, he said the government's focus on economic recovery, restoration and reconstruction was a step in the right direction. He also welcomed initiatives aimed at preparing the economy for LDC graduation and strengthening domestic industries and infrastructure.
Dr Mashrur Reaz described the proposed budget as a mix of opportunities and risks, noting that while some measures reflect a pro-business stance, macroeconomic assumptions appear overly optimistic.
Using a "traffic light" framework, he termed provisions such as the increase in the tax-free income threshold and absence of major new burdens on businesses as positive signals.
However, he cautioned that growth and inflation targets may be difficult to achieve given current macroeconomic realities, including pressures in the financial and external sectors.
Economist Dr Abdur Razzaque identified both supply-side and demand-side weaknesses as key risks facing the economy, noting that prolonged high inflation has significantly eroded consumers' purchasing power.
He said four years of elevated inflation have created a clear demand deficit, weakening consumption and dampening industrial output.
"Without bringing inflation under control, it will be difficult to address these challenges," he said.
Dr Razzaque also highlighted what he termed "unusual import compression", pointing to a sharp contraction in imports of capital machinery and industrial raw materials despite a growing economy.
Transcom Group Chief Executive Officer (CEO) Simeen Rahman said the budget has attempted to simplify business operations, adding that it is more business-friendly compared to previous years.
She noted that bond facilities for the pharmaceutical industry, as well as for all exporters, have been provided in the budget, which is expected to reduce the cost of doing business and enhance competitiveness.
Mir Nasir Hossain said the budget has tried to be inclusive, but lacks a clear roadmap on revenue mobilisation from different sources, which should have been included.
Kamran T. Rahman said the proposed budget is the largest in terms of expenditure, revenue and deficit in the country's history.
However, he cautioned that without new reforms in the tax system, the burden of additional revenue mobilisation would fall on existing taxpayers, posing risks for business and investment.
Bangladesh Association of Banks (BAB) Chairman Abdul Hai Sarker said the budget lacks clear direction on revenue enhancement, adding that foreign investment will not flow unless local businesses feel confident and comfortable.
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