Government debt from the banking system in Bangladesh has surged, with a net borrowing of BDT 38,510 crore recorded by March 10 of the current fiscal year. This marks a significant increase, almost double the amount borrowed in the first seven months of the year. The rise is attributed to factors such as lower revenue collection, unmet loan expectations from savings certificates, and decreased foreign loans. While government borrowing typically increases toward the end of the fiscal year, the amount borrowed so far is below the target set by the government. The banking sector’s current situation has led to a revision of borrowing targets, with the government aiming to limit its debt to BDT 90,000 crore. Additionally, the government’s operational costs continue to rise, compounded by increasing interest payments on outstanding loans. Bangladesh’s revenue collection in the first half of the fiscal year was lower than the previous year, and foreign borrowing has decreased. As of March 10, 2024, the total government debt in the banking system stood at BDT 5,12,999 crore. Despite this, special measures have been taken to alleviate the pressures on weaker banks. High inflation is also impacting people’s saving abilities, with deposits growing by a modest 7.47% last year. To control inflation, interest rates have been raised, and inflation has decreased to 9.34%, with expectations of further reduction.
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