With national elections and a new administration expected within months, Bangladesh’s interim government has moved to trim the current fiscal year’s budget by Tk 150 billion while outlining an ambitious framework for the next one, officials said.

The decision came at a meeting of the fiscal, monetary, and exchange-rate coordination committee on Monday, chaired by Finance Adviser Dr Salehuddin Ahmed.

The adjustment reduces the existing Tk 7.9 trillion budget, reflecting a broader economic slowdown and cautious spending under the interim regime formed after the July 2024 uprising.

The inflation target has been revised upward to 7.0% from 6.5%, while the growth forecast has been lowered to 5.0% from 5.5%. Officials said the contractionary policy would continue to restrain public spending throughout the year.

Central bank representatives at the meeting supported maintaining the current policy rate to curb inflation, resisting calls for monetary easing.

The committee also reviewed revenue performance, noting improved collection in recent months, and stressed the need to raise the tax-to-GDP ratio—currently below 8%—in line with International Monetary Fund (IMF) recommendations.

Sources said preliminary estimates for the 2025–26 budget suggest an overall outlay of around Tk 8.5 trillion.