The relationship between budget deficits and inflation is not automatic. It depends largely on how the deficit is financed, the state of aggregate demand, the output gap, and the quality of public expenditure.

With inflation still biting, revenues lagging and borrowing pressures rising, the new fiscal plan is expected to test how far policy can stretch before economic constraints push…

The finance minister is proposing Bangladesh's largest-ever budget, setting a 6.5% growth target and pledging to bring inflation down to 7.5%