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Government debt rises by Tk 5.40 lakh crore in two years

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Government debt rises by Tk 5.40 lakh crore in two years
In just two years, Bangladesh's government debt has increased by Tk 5.40 lakh crore. On 30 June 2022, government debt stood at Tk 13.44 lakh crore; on 30 June 2024, it rose to Tk 18.89 lakh crore. These figures were highlighted in a press briefing note issued on Sunday (15 November) on the occasion of the first International Debt Management Conference in Cox's Bazar.

According to the note, at the end of June 2024, government debt was 36 percent of GDP; at the same time, the country's total external debt, comprising both the public and private sectors, was about USD 104 billion, compared with about USD 23.5 billion in 2009. Pressure to repay external debt will increase further in the coming years — in fiscal year 2025-26, principal and interest payments will cost USD 4.5 billion, and by fiscal year 2029-30 it may reach about USD 5.5 billion. In fiscal year 2023-24, the government's interest payments exceeded Tk 1 lakh crore; in that fiscal year, external debt repayments, including principal and interest, stood at USD 3.4 billion.

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The note said that when it assumed office in August 2024, the government's borrowing from Bangladesh Bank had risen to Tk 56,750 crore and reserves had fallen to USD 20.5 billion. Under the current government, government financing from Bangladesh Bank has fallen to Tk 482 crore in June 2026 and reserves have risen above USD 30 billion. The interest rate on 91-day Treasury bills has also declined from about 12 percent to currently between 8 and 9 percent.

 

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In the future plan of management, increasing revenue collection has been identified as the most important reform. Emphasis has been placed on expanding the tax base, reducing unreasonable tax exemptions, and digitizing the VAT and income tax systems. Alongside this, plans have been outlined for restructuring the banking sector, prioritizing low-interest long-term loans instead of costly short-term loans, and using new financing instruments such as Eurobonds, sukuk, green bonds and blue bonds. The note was prepared for the speech of Finance and Planning Minister Amir Khosru Mahmud Chowdhury.

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