Bangladesh’s interim government is preparing a scaled-down budget for the next fiscal year (FY 2025-26), setting a GDP growth target of 6% amid economic slowdowns and weak revenue collection, officials said.

The finance ministry has started working on the budget following directives from Chief Adviser Prof. Muhammad Yunus. Finance Adviser Salehuddin Ahmed will lead a series of pre-budget consultations, beginning Sunday with economists, followed by discussions with business leaders, economic reporters, and other stakeholders.

Due to parliament’s absence, the proposed budget may be announced via a televised speech. The pre-budget discussions are expected to conclude by April.

Officials said the GDP growth target for FY26 will be set lower than this year’s 6.75%, while the revised target for the current fiscal year may drop to 5.25% due to flood damage and contractionary monetary policies to curb inflation. Despite past political unrest and an unstable business climate, officials anticipate higher growth next year with gradual economic improvements.

Multilateral lenders, including the World Bank, IMF, and ADB, have also projected lower growth for the current fiscal year but expect a rebound next year.

The budget size may be reduced to Tk 8 lakh crore, with the Annual Development Programme (ADP) allocation at Tk 2.4 lakh crore. This follows directives from the chief adviser to further cut expenditures from the draft budget of Tk 8.48 lakh crore.

The targeted inflation rate for FY26 is expected to be 6.5%, down from around 8% in the current year’s budget.