2024-03-24 09:58:25
Government borrowing has increased. At the end of the first quarter (July-September 2023) of the current fiscal year 2023-2024, the total accumulated debt (domestic and foreign) of the government stood at 16 lakh 55 thousand 156 crores. It is 33.35 percent of GDP.
At the end of the last financial year 2022-2023 or at the end of June 2023, the total accumulated debt of the government was 16 lakh 17 thousand 313 crores. Accordingly, the actual debt of the government has increased by 37 thousand 843 crores in the first quarter of the current financial year. Last week, the finance department of the finance ministry finalized the latest calculation of the accumulated debt of the government.
Sources in the Finance Department said that overall debt levels have increased due to increased government spending to deal with the post-Corona situation and the Russia-Ukraine war. But it is still claimed to be far below the risk threshold. According to the International Monetary Fund’s (IMF) ‘Debt Sustainable Framework’ (DSF) criteria, 55 percent of GDP is considered risky.
Economists say that the government’s debt-to-GDP ratio has not crossed the threshold, but the debt-to-GDP ratio has crossed the threshold long ago. The debt and interest liability of the government is expected to increase further in the future. According to Bangladesh Bank, this is the first time that the foreign debt of the government has crossed 100 billion dollars.
According to the finance department, apart from this loan, there are some financial guarantees provided by the government. At the end of September 2023, the accumulated financial guarantee amount of the government stood at 95 thousand 942 crore 21 lakh taka in Bangladeshi currency. Out of this, foreign source guarantee amount is 63 thousand 669 crore 60 lakh taka and domestic source guarantee amount is 32 thousand 272 crore 61 lakh taka.
According to the finance department’s calculations, the debt ratio of the government as per the size of GDP has decreased by about 3 percent at the end of last September, despite the increase in the cumulative debt position in terms of money. At the end of June 2023, the total accumulated debt of the government was 36.34 percent of GDP.
According to the calculations of the finance department, the amount of domestic debt is Tk 9 lakh 74 thousand 92 crore (19.63 percent of GDP) and the amount of foreign debt is Tk 6 lakh 81 thousand 64 crore (13.72 percent of GDP) in Bangladeshi currency.
Earlier, at the end of June last year, the accumulated domestic debt of the government was Tk 9 lakh 44 thousand 335 crore (21.22 percent of GDP) and the accumulated foreign debt was Tk 6 lakh 72 thousand 977 crore (15.12 percent of GDP) in Bangladeshi currency.
According to the finance department, 59 percent of the total accumulated debt of the government is domestic and 41 percent is external debt. The review shows that among the accumulated domestic debt, the government’s borrowing from the banking system is the largest. On the other hand, the accumulated debt of the government in the savings sector is comparatively very less. Now the amount of borrowing from this sector has turned negative i.e. the government has to repay more than the borrowing from this sector.
The finance department believes that due to reforms in the savings bond sector, the amount of government borrowing from this sector will gradually decrease to meet the budget deficit. The government wants to bring down the target of borrowing from savings bonds to zero in the next few years.
According to the finance department, 56 percent of the accumulated total domestic debt is taken from the banking system. In terms of money, the amount was 5 lakh 38 thousand 785 crores. The remaining 37 percent of the loan was taken from the savings sector (Tk 3 lakh 63 thousand 968 crore) and 7 percent was taken from the GPF fund (Tk 71 thousand 339 crore).
Among the accumulated loans taken from the banking system, 1 lakh 42 thousand 208 crores from treasury bill sector, 3 lakh 78 thousand 577 crores from treasury bonds and SPTB sector and 18 thousand crores from sukuk have been taken.