In the first four months of FY2024, the Bangladesh government borrowed BDT 39,218 crore, up from BDT 2,295 crore last year. Of this, BDT 17,280 crore came from banks, and BDT 21,938 crore from non-banking sources. This rise in borrowing coincided with the transition to an interim government, which required additional funding. Total government debt to the banking sector now stands at BDT 486,201 crore, with BDT 455,380 crore owed to non-banking sources.
The government’s domestic borrowing target for the fiscal year is BDT 160,000 crore, with BDT 137,500 crore from banks and BDT 23,400 crore from non-bank sources. Economists warn that increased reliance on bank borrowing may crowd out private sector credit amid ongoing liquidity issues. The government uses both bank and non-bank borrowing to finance its budget deficit, with a balanced approach recommended to avoid limiting private sector access to funds and hindering economic growth.
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