The government’s borrowing from the banking system declined by Tk 503 crore during the first four months (July–October) of the current fiscal year (FY2025), as loan repayments exceeded new borrowings. Officials attribute this decline to strong revenue growth, increased foreign loans, and reduced development spending, which together have lowered the government’s need for domestic borrowing.

According to data from Bangladesh Bank, total government borrowing from the banking sector stood at Tk 550,502 crore at the end of October, down from Tk 550,905 crore in June. While borrowing from the central bank increased slightly due to accounting adjustments linked to IMF funds, borrowing from commercial banks fell sharply.

A senior Bangladesh Bank official said the government has significantly cut back on development expenditure, while revenue collection in the first quarter showed a growth of 20.45% compared to the same period last year. “The government is also receiving large inflows of foreign loans from institutions like the IMF, which is reducing pressure on domestic borrowing,” the official added.

During July–September 2025, total revenue collection reached Tk 91,005 crore, showing notable improvement. Meanwhile, after three years of decline, borrowing through savings certificates increased by Tk 1,946 crore, bringing the total outstanding amount to Tk 340,445 crore by the end of September.

The FY2025 national budget set a borrowing target of Tk 1.04 trillion from banks and Tk 125 billion from savings certificates—lower than the previous year’s targets. In FY2024, the revised target for bank borrowing was Tk 990 billion, while borrowing through savings certificates was targeted at Tk 154 billion.

Economists note that this decline in bank borrowing reflects both fiscal discipline and slower project implementation, as the government focuses on inflation control and debt sustainability.

Bangladesh Bank has kept the policy repo rate unchanged at 10%, prioritizing inflation management. Inflation, which had remained in double digits for much of the past year, eased to 8.17% in October. The central bank has said it will consider adjusting the policy rate once inflation drops below 6%.

At the same time, the private sector credit growth stood at just 6.29% in September — one of the lowest in recent years — reflecting sluggish investment demand and tight liquidity in the banking sector.

Analysts believe that while lower government borrowing eases pressure on banks, continued revenue growth and prudent fiscal management will be crucial for sustaining macroeconomic stability in the coming months.