The government’s interest payments surged by 22.14% to Tk 92,538 crore in the last fiscal year, up from Tk 75,759 crore in 2021-22. This increase was primarily due to the higher cost of borrowing, driven by elevated interest rates for government securities.
Of the interest expenses, Tk 83,086 crore went toward servicing domestic debts, with the remaining Tk 9,452 crore servicing loans secured from the external sector. The higher cost of government securities was attributed to liquidity shortages in the banking sector.
The continuous volatility in the foreign exchange market and the significant depreciation of the Taka against the US dollar also contributed to liquidity shortages. The total debt-to-GDP ratio was 36.34%, significantly lower than the International Monetary Fund’s threshold of 55%.
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