Highlights
- Government’s domestic debt has reached nearly Tk 11 lakh crore.
- Debt increased by over Tk 1.5 lakh crore in one year.
- Majority of borrowing came from the banking sector.
- Higher borrowing linked to budget deficit and lower revenue collection.
- Government has already exceeded its borrowing target for the fiscal year.
Domestic Debt Continues to Rise
Bangladesh’s government borrowing from internal sources continues to increase. According to a report by Bangladesh Bank, total domestic debt stood at Tk 10,94,378 crore at the end of January. This is a sharp rise from Tk 9,42,507 crore during the same period last year—an increase of Tk 1,51,871 crore in just one year.
Borrowing Trends This Fiscal Year
From July to January of the current fiscal year, the government borrowed Tk 72,647 crore from domestic sources. In comparison, during the same period in the previous fiscal year, borrowing was Tk 40,144 crore showing a significant increase. This means domestic borrowing has grown notably in the first seven months of the current fiscal year.
Major Share from Banking Sector
Out of the total borrowing:
- Tk 64,923 crore came from the banking sector
- Tk 7,723 crore came from non-bank sources
By contrast, last year’s figures were much lower for banks and higher for non-bank sectors. Currently, cumulative domestic debt stands at:
- Tk 6,10,953 crore from banks
- Tk 4,83,424 crore from non-bank institutions
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Reasons Behind Rising Debt
Experts say most of this borrowing took place during the interim government period. The funds were mainly used for:
- Election-related expenses
- Investment in new banks
- Covering operational costs
Lower-than-expected revenue collection also forced the government to depend more on domestic borrowing.
Budget Deficit Driving Borrowing
Every year, the government presents a budget with a significant deficit. To cover this gap, it relies on two main sources:
- Domestic borrowing
- Foreign borrowing
When foreign funds are insufficient, the government increases borrowing from local sources such as banks, financial institutions, insurance companies, and savings certificates.
Borrowing Target Already Exceeded
Another central bank report shows that by March 30; the government had already borrowed Tk 1,06,051 crore exceeding its full-year target even with three months remaining in the fiscal year. This indicates growing financial pressure on the government.
Foreign Debt Also Increasing:
Alongside domestic debt, foreign borrowing is also rising. As of June, foreign debt stood at Tk 9,49,011 crore, while by December it reached around $113.51 billion (approximately Tk 13.9 lakh crore).
Source: Amar Desh
