Bangladesh’s budget deficit surged by over 73% in the first seven months of the current fiscal year, compared to the same period in FY2023–24, mainly due to weak tax revenue, according to official data.

The Ministry of Finance figures show total expenditure from July to January FY2024–25 reached Tk 2.746 trillion, while revenue stood at Tk 2.362 trillion, leaving a deficit of Tk 384.93 billion. This is significantly higher than the Tk 222.44 billion deficit recorded during the same period last year.

Of the total spending, operating expenditure accounted for Tk 2.233 trillion, while development expenditure stood at Tk 512.71 billion.

The now-defunct National Board of Revenue (NBR) collected Tk 1.99 trillion—just over 40% of the annual target. Indirect taxes, including VAT, made up the bulk of this amount, with VAT contributing 38.54%, income tax 33.28%, and import duties and other taxes making up the rest.

Non-tax revenue performed relatively better, reaching Tk 367.2 billion—around 80% of the annual goal.

On the spending side, domestic interest payments were the largest outlay, totalling Tk 650.86 billion—nearly 70% of total domestic interest obligations. Foreign interest payments rose to Tk 108.16 billion, nearly 53% above the target. Government salaries consumed Tk 62.69 billion, nearly half the annual allocation.

To bridge the gap, the government borrowed Tk 233.62 billion from domestic banks and Tk 175.25 billion from external sources.

The FY2024–25 budget is set at Tk 7.97 trillion, with a projected deficit of 4.53% of GDP.