Photo: Collected
Between 30 June 2022 and 30 June 2024, the country’s government debt rose by more than Tk 5,40,000 crore in two years. According to a press briefing note, government debt increased from Tk 13,44,000 crore to Tk 18,89,000 crore during this period.
The note, which sets out various details of the country’s debt situation, was issued this morning, Sunday, on the occasion of the two-day international debt conference in Cox’s Bazar.
Prepared for the speech of Finance and Planning Minister Amir Khasru Mahmud Chowdhury, the note highlights various aspects of the challenges, reforms and future plans of debt management.
According to the note, government debt stood at 36 percent of gross domestic product at the end of June 2024. At the same time, the country’s total external debt, public and private combined, was about USD 104 billion.
Interest payments have also risen significantly in step with debt. In the 2023-24 fiscal year, the government’s interest payments exceeded Tk 1 lakh crore.
Interest payments on external debt rose three and a half times in the 2023-24 fiscal year compared with 2021-22. In that fiscal year, USD 3.4 billion had to be repaid in principal and interest on external debt.
The note says USD 4.5 billion will be spent on repaying principal and interest on external debt in the 2025-26 fiscal year. This expense could rise to about USD 5.5 billion in the 2029-30 fiscal year.
According to the briefing note, when the caretaker government took office in August 2024, government borrowing from Bangladesh Bank to meet the budget deficit had risen significantly.
Government borrowing from Bangladesh Bank was Tk 730 crore in June 2022, which rose to Tk 56,750 crore in June 2024. In addition, foreign exchange reserves fell to USD 20.5 billion at the end of July 2024.
The note states that progress has been made in debt management under the current government. It says government financing from Bangladesh Bank fell from Tk 56,750 crore in June 2024 to Tk 482 crore in June 2026. The note also claims that foreign exchange reserves have risen to over USD 30 billion.
According to the note, the government’s cost of borrowing has also fallen. The interest rate on 91-day treasury bills was about 12 percent in June 2025; it fell below 10 percent in June 2026. The rate is currently between 8 and 9 percent.
Increasing revenue earnings has been given the highest priority in long-term debt management reform. To this end, emphasis has been placed on widening the tax net, reducing unjustified tax exemptions and digitalising the VAT and income tax systems.
The note also mentions plans to restructure the banking sector, recapitalise state-owned banks and restore discipline in the financial sector.
It calls for prioritising low-interest long-term loans over costly short-term loans. Emphasis has also been placed on properly scrutinising borrowed funds and ensuring they are spent on projects that can contribute to economic growth.
There are plans to use alternative financing instruments such as Eurobonds, sukuk, green bonds and blue bonds to attract foreign investment to the country’s capital market and broaden the sources of borrowing. Raising funds from international capital markets at an appropriate time is also under consideration.
The finance minister’s speech says how effectively borrowed money is used matters more than how much is borrowed. Sustainable debt management in the long term can be ensured only by investing borrowed funds in productive, high-return projects and by increasing revenue earnings.
The Finance Division of the finance ministry and the Asian Development Bank have jointly organised the two-day international debt conference in Cox’s Bazar. Experts from the World Bank, the International Monetary Fund, the Asian Development Bank and various countries are taking part.
By the numbers
According to the projections in the Finance Division’s medium-term macroeconomic policy statement, the government’s total domestic and external debt was expected to reach Tk 23,42,000 crore at the end of the 2025-26 fiscal year, Ittefaq reported on 13 July 2025.
The same projections put the debt at Tk 26,03,200 crore by the end of the 2026-27 fiscal year.
Sources
Background sources: Ittefaq, 13 July 2025
