Prime Minister's Adviser on Finance and Planning Dr Rashed Al Mahmud Titumir stated on Tuesday that the previous government left the nation's economy in a critical state prior to leaving office. He described the situation by stating that the economy had been left in the intensive care unit (ICU).
He said the incumbent government had inherited a fragile economy, critically low revenue collection and a huge debt burden.
The government has undertaken coordinated initiatives to reform the revenue system, boost investment, create employment, and restore economic momentum, he added.
Speaking to journalists at the Revenue Building in Agargaon in the capital, the adviser discussed the country's economic situation, revenue collection, banking sector, public debt, investment prospects, and ongoing reform programmes.
"We inherited an economy that had been shattered across almost every sector," he said, adding that "the banking sector alone will require around US$40 billion for recovery."
"In other words, they left the economy in the ICU and fled," he stated.
Titumir identified low domestic revenue mobilisation and the mounting debt burden as two major challenges facing the economy.
The country's domestic resource mobilisation stands at only 6.67 percent of gross domestic product, representing one of the lowest ratios in South Asia and globally, he said.
To address the situation, the government aims to raise the revenue-to-GDP ratio to 10 percent by 2030. It also plans to increase allocations to the education and health sectors to 5 percent of GDP.
"We are committed to fulfilling the promises we made to the people," he said, adding that "the World Bank, the International Monetary Fund (IMF) and other multilateral development partners are aware that we have undertaken the reform programmes on our own initiative."
The adviser stated that the country's debt had increased significantly during the previous government's tenure, rising by 323 percent since 2009.
He identified three major categories of debt: government debt, government-guaranteed debt and private-sector debt.
According to preliminary estimates, government debt stood at US$90 billion as of June 2026.
He stated that the government had already spent US$4.49 billion on interest and principal repayments, adding that the repayment burden would increase further. Some estimates suggest that annual debt servicing could reach US$7.6 billion by 2030.
To tackle the challenges, the government has formed three separate task forces focusing on income tax, customs duties, and value-added tax (VAT). These initiatives have already contributed to an improvement in revenue collection, he said.
Revenue growth stood at 2.5 percent between fiscal years 2023-24 and 2024-25, but increased to 12.03 percent following the current government's initiatives, Titumir said.
Customs houses recorded the highest-ever duty collection towards the end of the last fiscal year, while efforts are underway to achieve similar progress in income tax collection.
He acknowledged that the ongoing crisis in the Middle East had created economic pressure and affected revenue mobilisation, but stated that the government was working to achieve its targets despite the challenges.
Addressing institutional reform, he stated that a proposal had been put forward to create two distinct entities: a Revenue Collection Division and a Revenue Policy Division. This followed consultations with relevant stakeholders, and the government anticipates implementing the initiative in the near future.
Responding to questions about revenue targets and economic growth, Titumir stated that the government had taken several measures to revive economic activities. These measures include increasing public development expenditure, expanding credit flows to the private sector, strengthening remittance inflows, and enhancing the purchasing power of low-income people.
He said the government had taken initiatives to change the fiscal year because the implementation of the Annual Development Programme (ADP) becomes difficult during the monsoon season.
The government also aims to move away from the practice of rushing to implement development projects in June, he added.
Emphasising the need to increase private-sector credit, he said easier access to finance was essential to keep the wheels of the economy moving.
He stated that Bangladesh Bank has already announced a package to support this objective, and that one-fifth of the package has been disbursed.
The adviser stated that a large number of people had fallen below the poverty line, adding that a survey was currently underway to assess the implementation of the Family Card programme for poor and extremely poor households.
A Farmers' Card programme has also been initiated to support farmers.
"The economy will move forward on the basis of four factors: investment, government expenditure, consumption and export earnings," he said.
He noted that remittance inflows were increasing and different indicators of the Purchasing Managers' Index (PMI) were pointing towards economic expansion.
Investor and entrepreneur confidence was also improving, he said, noting that China had commenced investment in its economic and industrial zone in Chittagong. Additionally, Japanese investors were showing interest in manufacturing and investment in Bangladesh.
Titumir stated that the government's vision is to transform Bangladesh into one of the world's leading manufacturing hubs and an important export gateway, with a special emphasis placed on private-sector investment.
Despite global challenges, including rising energy prices, the government expects the economy to achieve 6.5 percent growth in the current fiscal year, he said.
He added that the IMF and the World Bank had warned of further economic difficulties in the absence of reforms, while the current government was implementing reform programmes on its own initiative with support from multilateral development partners.
Responding to questions concerning transparency in revenue collection and the publication of economic statistics, Titumir stated that the government was not withholding information.
Revenue data concerning income tax, customs duties, and value-added tax were being published regularly, and the government intended to further strengthen the publication of statistics under an open-data policy.
He stated that the reported default loan ratio within the banking sector, which was previously recorded at 11 percent, had increased to 35.72 percent following the completion of forensic audits.
He added that it was important to ensure the accuracy of information in order to present the actual economic situation.
He said the government was also working to publish regular statistics on remittance inflows and revenue collection through the iBAS system, which provides daily information on government revenue and expenditure.
Regarding the accuracy of GDP calculations and the tax-to-GDP ratio, the adviser stated that a forensic audit had been carried out to verify the country's GDP data.
Independent researchers carried out the audit using scientific methods, followed by a peer review involving leading economists from different schools of thought.
The report will be published on November 14, he said, adding that it would cover gross domestic product (GDP) calculations, the tax-to-GDP ratio and related issues.
"We have to ensure the accuracy of our data. Politics should not be mixed with this," he said.
Regarding taxpayer harassment, VAT refunds, and tax compliance, Titumir stated that reforms were being implemented within the revenue administration to strengthen taxpayer confidence.
He set out two priorities: to halt unnecessary harassment of taxpayers and to accelerate the digitalisation of the revenue system.
He stated that the government would review whether the risk-based audit system was functioning properly and assess the progress of VAT digitalisation.
The activities of various wings within the revenue administration were also under observation, alongside the collection of feedback from both large and small taxpayers to address their concerns.
When asked about the possibility of imposing additional excise duty on energy and its potential impact on inflation, Titumir stated that technical-level discussions were currently underway with the IMF under a new programme.
He said the discussions would subsequently move to the mission and policy-making levels before being finalised and presented to the IMF Board.
Addressing tax exemptions and the tax-to-GDP ratio, he stated that the government's tax policy would be anchored on fairness, aiming to balance increased revenue mobilization with the tax burden placed on ordinary people.
"Our policy is to increase tax rates while supporting productive industries," he said.
He added that tax reductions had been introduced in selected sectors to encourage the production of essential goods and promote environmentally friendly industries, including electric vehicles and solar power.
Despite increases in international fuel prices, the government had not passed on the full extent of the price increases to consumers, he said. He added that a fair, consumption-based pricing policy was also being followed in the electricity sector.
Titumir stressed the need to enhance the skills and professional capacity of revenue officials to keep pace with changes in the global economy.
He said officials needed specialised training in financial statement analysis, international business and transfer pricing.
Officials who achieve their assigned revenue targets will be evaluated and recognized in the future, while the accountability of both government and political leadership will also be strengthened, he added.
He said that transforming Bangladesh into a global manufacturing and trade hub would necessitate skilled revenue professionals who are capable of understanding the accounting systems and transactions of multinational companies.
He stated that the government was working to provide revenue officials with the necessary training and access to relevant databases.
Titumir stated that the government was simultaneously pursuing revenue reforms, investment promotion, the expansion of production, and social protection initiatives in order to revive the economy and place it on a path toward sustainable growth.
Why it matters
The administration's sweeping fiscal reforms and revenue targets directly shape the economic trajectory and investor confidence in Bangladesh.