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Letter To the Editor

Debt servicing weakening our economy

Published : Thursday, 28 November, 2019 at 12:00 AM  Count : 125

Dear Sir

Debt servicing has become a worrisome issue as government has been taking foreign currency debt with high interest rates.  In the1st quarter of this fiscal year, the government debt servicing has surged compare to the corresponding period of last fiscal year. Moreover the repayment of the interest escalated by 35 per cent. Our reliance on the foreign debts has been on the rise as government took different mega projects in its fold. For financing the mega projects, government has borrowed foreign currency loans since the government unable to funding the projects within the internal resources.

The experts opined that taking high interest rates foreign loans by the government will upped the costs of the debt servicing. To repayment of debt interest and principal, the government is imposing various taxes and VAT which may discourage the foreign and local investors. Moreover, the higher level of debt servicing costs will deter the government to reduce investments in different sectors. Bangladesh is no more enjoying the benefits of soft loans/cheap debts. There we recommend the government not to borrow costly foreign debts which may pave the foreign lenders the way for intervention to our economy.

Mohammad Zonaed Emran
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