Bangladesh’s fiscal landscape continues to grapple with a widening budget deficit, with the shortfall for the first seven months of the current fiscal year ballooning to nearly Tk 230 billion.
Government expenditure has outpaced revenue receipt, exacerbating the deficit, which stood at Tk 83.38 billion during the initial six months of the fiscal year beginning July 1, 2023.
According to a recent report from the finance division, total revenue mobilization witnessed a commendable increase of more than 13 percent, reaching Tk 2.24 trillion during the July-January period compared to the corresponding period in the previous year.
However, total expenditure surged to Tk 2.47 trillion during the same period, with both development and non-development expenditures registering significant upticks.
Development expenditure escalated by nearly 30 percent to Tk 558.33 billion, while non-development expenditure rose by over 13 percent to Tk 1.92 trillion, as per government accounts.
Economists like Dr. Ahsan H. Mansur anticipate a further widening of the deficit in the remaining months of the fiscal year. Historically, Bangladesh’s fiscal deficit tends to expand notably from January onwards, following a relatively subdued performance in the first half of the fiscal year, where spending is limited to approximately 30 percent of the budget.
The government has set an ambitious target for total revenue to increase by nearly 16 percent to approximately Tk 4.50 trillion by the end of the fiscal year, aiming to execute its Tk 7.62-trillion budget. However, concerns loom over escalating borrowing costs, with interest payments soaring by nearly 16 percent to Tk 605.55 billion as of January, accounting for over 64 percent of the yearly estimation.
