Government debt in Bangladesh surged by 13.3% in the last fiscal year, reaching a record Tk 18.3 lakh crore, with domestic debt accounting for 55.7% of the total. While the debt-to-GDP ratio of 36.3% remains within the IMF’s safe zone, the increasing debt volume poses significant challenges due to weak revenue collection and low foreign currency reserves.
Interest payments rose by 21% to Tk 1.1 lakh crore, comprising one-sixth of the national budget. Foreign interest payments jumped by 60%, while domestic interest payments increased by 17%. The government resorted to issuing treasury bonds to settle arrears, further straining finances.