Govt interest payments consume 14.24% 

In the proposed national budget for fiscal year 2024-2025, the government's interest payments remain a significant burden, consuming 14.24 per cent of the total budget. Both foreign and domestic debt increase the government’s liabilities.

This amounts to Tk 1,13,500 crore, with Tk 93,000 crore allocated for domestic debt interest payments and Tk 20,500 crore for foreign debt interest, creating substantial pressure on the budget.

In the revised budget of Tk 7,14,418 crore for FY24, the interest repayment amount was Tk 1,05,300 crore, accounting for 14.73 per cent. Comparatively, the proposed budget of Tk 7,61,785 crore for FY24 allocated Tk 94,376 crore for interest payments, representing 12.38 per cent.

According to Bangladesh Bank, the country's domestic debt stood at Tk 8,16,004 crore as of the March quarter of FY24. Additionally, the external debt stood at over $100 billion as of December 2023.

This significant increase in interest payment burden places further pressure on the FY25 budget, forcing the government to borrow more than ever to fund the upcoming budget.

The government has set a target of borrowing more than Tk 18,682 crore from domestic and foreign sources in FY25. This is equal to 5 per cent of the gross domestic product (GDP). The revised loan target for the current financial year is about Tk 2,32,918 crore.

According to finance department officials, there is a USD crisis at present. Due to this, a plan has been made to take more foreign loans than in FY24. The revised foreign debt target for FY24 is Tk 76,293 crore, which is Tk 14,407 crore less than the proposed FY25 budget.