Originally posted in Dhaka Tribune on 6 April 2026
Govt to increase austerity measures for tackling global instability
This decision to control expenditure has been taken as a precautionary measure in the context of the ongoing war situation in the Middle East and a possible global economic crisis
The government is on the path of strict spending cuts to deal with the ongoing geopolitical tensions in the Middle East and the impact of global economic instability.
As part of this, restrictions have been imposed on government officials from traveling abroad, purchasing new cars and purchasing various equipment including computers.
The Finance Department of the Ministry of Finance issued an emergency circular on Sunday (April 5) in this regard to save government expenditure as part of the implementation of the revised budget for FY26.
The instructions have come into effect from the day of issuance of this circular signed by Deputy Secretary of the Finance Department Mohammad Zakir Hossain.
The circular said that this decision to control expenditure has been taken as a precautionary measure in the context of the ongoing war situation in the Middle East and a possible global economic crisis.
The directive will be applicable to all government, autonomous and state-owned institutions, public sector corporations and state-owned financial institutions.
According to the new directive, participation in government-funded training, seminars, symposiums and workshops abroad will be completely closed for the time being.
At the same time, the purchase of new motor vehicles, watercraft and aircraft for government officials has also been suspended.
In addition, the interest-free special advance loan facility provided to government employees for purchasing personal vehicles has also been temporarily suspended.
A ban has also been imposed on new land acquisition and purchase of various equipment including computers under the operating budget.
A maximum expenditure limit of 50% of the allocation has been set for some sectors.
These include entertainment expenses of government offices, internal training activities of ministries or departments, construction of residential and non-residential buildings and beautification work of offices.
However, this limit for internal training will not be applicable in the case of government training institutes. And in those cases where the work of construction projects has already been completed by more than 70%, the necessary funds can be spent through special permission.
Considering the possibility of energy crisis, a maximum expenditure of 70% of the allocation has been ordered for the electricity, gas, petrol and lubricants sectors.
The same limit will also apply to the travel expenses of government officials.
The circular warns that if there is excess expenditure beyond the prescribed limit, no outstanding claims for that money will be accepted in the future.
Khandaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said that the country’s balance of payments situation is not yet very strong and there is not enough foreign exchange for imports. As a result, the government is walking on the path of expenditure reduction as a precautionary measure.
He said that if some money is saved through austerity, it will be possible to spend it on the social sector. At the same time, additional money is also needed for fuel imports.
According to him, long-term initiatives should be taken in addition to controlling short-term expenditure. Especially, expansion of solar irrigation systems in the agricultural sector and priority should be given to fuel-efficient vehicles in government procurement.
