Retreating from pandemic-era peak

Bangladesh's national budget is now shrinking in relative size even as the government struggles to deliver on its development commitments. The budget-to-GDP ratio, which peaked at 17 percent in FY2020, is estimated at 14 percent in FY2025, marking a gradual retreat from the expansionary stance seen during the Covid-19 era.

Official data shows that the country's fiscal footprint has narrowed each year since FY2020, reflecting both constraints on resource mobilisation and rising economic pressures.

At the same time, the government's ability to fully implement its development agenda remains constrained. In FY2023, operating expenses dominated the budget execution, comprising 64 percent of total actual spending, while development expenditure accounted for just 36 percent.

The skewed distribution underscores Bangladesh's reliance on recurrent administrative costs over long-term capital investments, despite repeated policy pledges to prioritise development.