Govt’s debt burden crosses Tk 22 lakh crore

Public
debt crosses Tk 22 lakh crore milestone
Domestic
borrowing rises to "insulate the economy"
Interim
government adds Tk 3 lakh crore debt
Bangladesh’s
total public debt burden has crossed Tk 22 lakh crore by December 2025 with a
growing reliance on domestic sources as the government looks to “insulate the
economy from foreign currency risks”.
Of the
total debt, Tk 3 lakh crore was borrowed during the interim government period,
according to the finance ministry’s latest quarterly bulletin.
The
bulletin states the public debt stood at Tk 18.9 lakh crore at the end of June 2024,
just a month before the interim administration assumed power. The figure was Tk
13.44 lakh crore at the end of June 2022.
During the
interim period, domestic debt rose by Tk 1.70 lakh crore, reaching Tk 12.5 lakh
crore by December. Foreign loans increased by Tk 1.47 lakh crore to Tk 9.59
lakh crore in the same period.
Domestic
borrowing dominates the government’s overall debt portfolio. As of December 31,
2025, the domestic and external liabilities constituted 57 percent and 43
percent of the total government debt stock, respectively.
“By
focusing on the local market, the government is deepening domestic liquidity
while reducing its exposure to exchange rate fluctuations,” said the bulletin.
During the
July-December period of the current fiscal year, the government’s total
borrowing rose by Tk 62,428 crore, or 13 percent, compared to the same period a
year earlier.
During the
period, loans from the foreign sector dropped by 59 percent to Tk 10,130 crore,
while domestic borrowing surged 70 percent to Tk 52,298 crore.
Of the
domestic borrowing, Tk 19,470 crore was borrowed from the central bank alone.
Most of
the domestic loans were raised through government securities. “A key feature of
the government’s approach was a clear shift toward long-term debt,” the finance
ministry said.
Meanwhile,
total interest payment during the July-December period rose by 22 percent to Tk
71,253 crore. Of these, interest payment for domestic borrowing stood at Tk
61,866 crore, a 25 percent surge from the same period a year ago.
While
increased domestic borrowing often raises concerns about “crowding out,” the
current landscape suggests a unique window of opportunity, said the ministry.
It argued
that ample liquidity in stronger banks, falling yields on government
securities, and subdued private-sector credit demand create conditions for
sustainable domestic financing without crowding out private borrowers.
By
leveraging this internal liquidity, the state is building a more resilient and
self-reliant fiscal framework that maintains stability without straining the
private credit market, it added.
















