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As Finance Minister Amir Khosru Mahmud Chowdhury prepares to unveil a Tk 9.38 trillion national budget for FY2026-27, economists and financial sector experts are calling on the government to focus on economic recovery and stability rather than pursuing aggressive growth ambitions.

They argue that Bangladesh’s economy is facing a challenging period marked by persistent inflation, a weakened banking sector, sluggish private investment and the lasting effects of financial irregularities. The closure of hundreds of factories and slow foreign investment have further compounded the pressure.

Distinguished Fellow at the Centre for Policy Dialogue (CPD), Dr Mustafizur Rahman, said the budget should address structural weaknesses before targeting higher growth.

“Bangladesh’s economy has reached a point where stabilisation must come before growth. To stabilise the economy, we need to rethink the banking system, investment infrastructure and port management. The budget must also lay out a roadmap for the post-LDC graduation era,” he said.

The concerns echo assessments by the World Bank and the IMF, which have identified high inflation, weak revenue mobilisation, banking sector vulnerabilities and unstable private investment as major risks to the economy. Both institutions have urged Bangladesh to pursue long-term structural reforms.

Economist Rumana Haq of the University of Dhaka warned that planned social protection initiatives, including family card and farmer card programmes, may struggle to achieve their goals without fiscal discipline and economic stability.

“These programmes require substantial funding. Without economic stability and good governance, the intended beneficiaries simply won’t benefit,” she said.

Financing the budget deficit remains another concern. The government plans to borrow nearly Tk 2.5 trillion, including around Tk 1.35 trillion from the banking system, a strategy that experts fear could increase pressure on financial institutions.

Professor Abu Ahmed, Chairman of the Investment Corporation of Bangladesh (ICB), said the government should broaden financing sources by strengthening the capital market.

“Without strengthening the equity market and bond market, the budget will not deliver results. The government must pursue asset securitisation and seriously examine why major companies are struggling, or choosing not to do business in Bangladesh,” he said.

The government has set a goal of transforming Bangladesh into a $1 trillion economy by 2034. While economists view the FY2026-27 budget as an opportunity to establish a roadmap toward that target, they caution that the objective will remain out of reach without stronger private sector participation.

Professor Shahidul Islam Zahid, Chairman of the Department of Banking and Insurance at the University of Dhaka, said high lending rates are discouraging investment.

“With lending rates currently at 15 percent, investment simply won’t come. Without investment and private sector engagement, the target is a distant dream. The government must first stabilise the economy and bring interest rates back to a normal level,” he said.

Khondoker Sakhawat Ali, Emeritus Fellow at Unnayan Samannay, said restoring confidence in the banking sector should be a top priority.

“Billions have been looted from banks. Every taka belongs to this country’s taxpayers. Depositors who cannot access their own money have lost faith in the entire banking system. There is no more alarming signal for an economy than that,” he said.

Economists broadly agree that this year’s budget should concentrate on restoring stability, rebuilding confidence and addressing structural weaknesses. They believe a recovery-oriented budget now could create the foundation for stronger economic growth in the years ahead.