BM Desk : The government’s borrowing in the first seven months of the current fiscal year has seen a significant increase, doubling in the last month alone. Analysts attribute this rise in government debt to several factors, including a decline in revenue collection, a decrease in foreign borrowing, and an inability to secure anticipated loans from savings certificates.

Despite this, Bangladesh Bank has indicated that the total debt incurred by the government thus far remains below the target established for the 2024-25 fiscal year. The original budget aimed for a borrowing target of 1,37,500 crore taka from banks, but the interim government has since revised this figure down to 99,000 crore taka.

In this context, Bangladesh Bank Governor Ahsan H. Mansur has stated that the government’s borrowing will be capped at 90,000 crore taka. Nevertheless, there has been a rapid increase in the government’s debt from the banking sector. From the start of the fiscal year until March 10, the government has borrowed a net total of 38,510 crore taka, compared to a bank debt of 13,571 crore taka in January.

As of March 10, the total government debt within the banking system has risen to Tk 512,999 crore, up from Tk 474,490 crore in June. The outstanding loans from commercial banks have climbed to Tk 44,105 crore, while loans from Bangladesh Bank have decreased to Tk 18,895 crore.

High inflation rates in the country have diminished the public’s saving capacity, with deposits growing by only 7.47 percent last year. The interest rate has been raised to 10 percent, contributing to a reduction in the inflation rate to 9.34 percent as of February.