Strategy for deficit financing

The deficit in the proposed budget for the upcoming 2026-27 fiscal year will stand at Tk 2.43 trillion, which is 3.6 percent of GDP. 

Out of the total deficit, Tk 1.27 trillion will be met from domestic sources and Tk 1.16 trillion from foreign sources. 

Out of the domestic sources, Tk 1.12 trillion will be met from the banking system. 

In the current 2025-26 fiscal year, it was Tk 1.18 trillion. That is, it has been proposed to reduce the amount of borrowing from the banking system by Tk 6,000 crore in the next fiscal year.

The finance minister noted that due to extensive borrowing during the previous government, the country's debt repayment and interest payment expenses have increased excessively. 

In the fiscal year 2005-06, the budget deficit was 2.9 percent of GDP. In the fiscal year 2023-24, the budget deficit increased to 4.05 percent of GDP.

A total revenue of Tk 6.95 trillion has been estimated for the fiscal year 2026-27, which is 10.2 percent of GDP. Of this, Tk 6.40 trillion is proposed to be collected through the National Board of Revenue and Tk 91,000 crore from other sources.

Tax changes and EV incentives

Usually, after the budget announcement, there are changes in the prices of some goods and services. Although the budget size has increased this year compared to last year, source tax, customs duty, VAT and surcharge have been increased on several products. 

As a result, the prices of these products may increase. On the other hand, tax exemptions and subsidies in some sectors will reduce the prices of products. Businessmen, investors and the general public will be paying attention to which sectors are seeing tax increases, where tax exemptions are being given and what impact this may have on the cost of living of the common people.