B Mirror Report:  The Bangladesh government has surpassed its annual bank borrowing target before the end of the 2025–26 fiscal year, as a record revenue shortfall and lower-than-expected foreign assistance have increased reliance on domestic financing to meet budgetary expenditures.

According to the latest Bangladesh Bank data, the government borrowed a net Tk 109,568 crore from the banking sector between July 2025 and May 10, 2026. The amount exceeds the fiscal year’s bank borrowing target of Tk 104,000 crore, despite nearly two months remaining in the budget year.

Government expenditures including salaries and allowances for public employees, interest payments on debt, subsidies, and development project costs have continued unabated, prompting increased dependence on bank financing.

Central bank figures show that the government’s outstanding bank debt rose from Tk 550,905 crore at the beginning of the fiscal year to Tk 660,473 crore by May 10, 2026.

Economists and banking sector experts attribute the rising borrowing needs to a sharp decline in revenue collection and slower inflows of foreign budget support. Data from the National Board of Revenue (NBR) show that revenue collection during the first ten months of the fiscal year fell short of the revised target by Tk 104,533 crore, marking the largest revenue gap in the country’s history.

Against a target of Tk 431,461 crore, the NBR collected Tk 326,928 crore through April, achieving growth of 10.6 percent. Officials acknowledge that reaching the annual target will be extremely difficult, as an additional Tk 176,000 crore would need to be collected in the remaining months.

The bulk of the government’s borrowing has come from commercial banks rather than the central bank. Of the total Tk 109,568 crore borrowed through May 10, Bangladesh Bank provided only Tk 5,115 crore, while commercial banks supplied Tk 104,453 crore, mainly through investments in Treasury bills and Treasury bonds.

Former Association of Bankers Bangladesh (ABB) Chairman Mohammad Nurul Amin said the government’s growing reliance on bank borrowing reflects the combined impact of weak revenue collection and delays in foreign financing.

He warned that excessive dependence on bank loans could pose long-term economic risks. Borrowing from the central bank can increase inflationary pressures through money creation, while heavy borrowing from commercial banks may reduce liquidity in the banking system and limit credit availability for private-sector businesses.

Analysts also noted that rising public debt increases the government’s interest burden, with a growing share of the national budget being allocated to debt servicing each year.

Bangladesh Bank data show that the country’s external debt stock currently stands at approximately $113 billion, while domestic debt continues to rise. Economists caution that prolonged reliance on debt-financed spending could place additional strain on public finances and the broader economy.