Higher debt to fund its infrastructure which level up the economy to a middle-income one by 2041. Various big projects include development projects with the view to transforming the country’s communication, transport and power infrastructure.
Eight mega projects are in implementation, whose completion is expected to raise Bangladesh’s GDP by as much as 4 per cent.
At the end of last fiscal year, Bangladesh’s total debt to GDP ratio hit 38 per cent, which is the highest among the past 13 years while the 70 per cent threshold recommended by the International Monetary Fund.
As of June 30, the total outstanding debt stood at Tk 11,44,297 crore, 36.7 per cent of which is attributed to foreign sources.
At the end of last fiscal year, Bangladesh’s total external debt stood at Tk 420,358 crore, which is the lowest in the last six years. It is equivalent to 13 per cent of GDP, meaning comfortably below the IMF’s recommended threshold of 55 per cent.
Meanwhile, in fiscal 2021-22, the government has allocated Tk 68,589 crore for loan repayment. The amount of total foreign debt servicing also rose to $1,900 million in fiscal 2020-21.
By improving the efficiency of public investment management, could be the way for improving the return from debt-financed expenditures.
Source: The Daily Star