The broad objective of macroeconomic policy is to contribute to economic growth and social well-being in an equitable and sustainable manner. Bangladesh is committed to achieve the goals of the 2030 Agenda, which embody the pursuit of an equitable society through an inclusive growth strategy. A macroeconomic policy would need to spearhead such a strategy. In doing so, the study has argued that the overriding challenge of macroeconomic policy in Bangladesh would precisely be in giving effect to the dual mandate of achieving macroeconomic stability and inclusive growth, as mentioned in the MPS. At the risk of repetition, the first steps towards designing a macroeconomic policy framework for inclusive growth would require, inter alia, a rethinking of a macroeconomic policy framework that goes beyond attaining ‘intermediate variables’ of stability, and focuses robustly on growth, employment and income (Stiglitz et al., 2006; Bhaduri, 2005). The challenges identified are— high and sustained growth and structural transformation to reach the UMIE status by 2031, reduction in continuously rising inequality, measures to deal with weak employment performance, addressing the unacceptably high incidence of a vulnerable population, among others. This would require strategic planning, including a more aggressive fiscal and monetary stance. The present paper has reviewed the usual macroeconomic policy instruments, and their current practices in Bangladesh. Regarding monetary policy, it has been observed that Bangladesh has maintained a comfortable stretch of price stability, and inflation has been relatively low. Monetary instruments which have an imprecise control over inflation targets, have been complemented by low budget and current account deficits to help sustain low inflation. One must note that, it would be difficult to get on to the much-anticipated higher growth path of achieving UMIE under the parameters that currently define existing stability conditions. This would involve, as the International Monetary Fund (IMF) suggests, ‘upgrading’ of macroeconomic practices to cope with various challenges. In the monetary sector, one such practice is the use of the market-determined ‘policy rate’. Despite various reforms undertaken to strengthen the banking and financial markets, the ‘policy rate’ (as understood in a developed money/financial market), cannot be applied since the ‘transmission mechanisms’ are very weak, and financial infrastructure is underdeveloped. This will require greater financial deepening, strengthening of credit and debit markets, and interbank transactions and integration. Given the recent trends in price stability, the monetary policy needs to adjust its ‘inflation only’ priority, and focus equally forcefully on its employment/inclusive growth mandate. This would entail stimulations and incentives to enhance domestic savings and investment, and boost aggregate demand. Private investment in Bangladesh is relatively low compared to its Asian comparators who have achieved higher growth and structural transformation. Financial markets are not only weak, but also fraught with anomalies, unacceptably high loan defaults and outright scams, especially in the PCBs and SCBs, which have shaken investors’ confidence. This requires firm action to institute an efficient regulatory and accountable framework. Financial sector deepening needs to factor in an inclusive financial structure, whereby access to credit markets can be extended to unbanked and underbanked populations and regions, the ‘rural connect’ in particular. This would also help ease credit market imperfections and the skewed credit distribution, as currently exist. The financial inclusion initiatives would need to step up within a strategic policy and regulatory framework. Such opportunities and access to credit for the disadvantaged poor, the small farms and enterprises, if appropriately designed and expanded through a comprehensive MPS and regulations, can by itself be an important redistributive measure, which could reduce the transfers and fiscal burdens. However, macroeconomic policies cannot, on their own, deliver desired employment and inclusion outcomes in the economy. Productive employment generation and state welfare are contingent on an integrated set of policies that would include various sectoral, labour market and institutional measures, which have to be incorporated in a dedicated budget. The present study has underscored the need for budget prioritization, especially in a relatively low revenue—GDP ratio scenario, in order to yield greater fiscal space, and identified measures to pursue the government’s stated goals of growth and equality. The paper also underscores the need for a measured fiscal expansion, to step up public investment to complement the slow growth in private investment, as well as to meet the needs of UMIE growth path through structural reforms and infrastructure development. Fiscal policy is not only about financing development, but also a political statement of the government regarding its stance on the economic and social well-being of the people. Public policy and public expenditure will be critical for a more focused social inclusion, i.e. a budget for social inclusion through a closer review of priorities in both revenue and expenditure portfolios. Closely linked to the above is the imperative of maintaining external stability. This is of paramount importance in not only maintaining low inflation but also in enhancing competitiveness. Maintaining a steady REER is crucial to supporting employment through growth and diversification of exports.