In the last fiscal 2024-25, the government spent Tk 1,34,430 crore on interest payments on domestic and foreign loans which is 17 per cent more than in fiscal 2023-24.
This information has been revealed by Finance Division of the Ministry of Finance.
Analyzing the information, it was found that in the last fiscal year, the highest 28 per cent of the operating budget as a single sector went to interest payments.
Of this, Tk 1,16,617 crore was spent on interest payments on domestic loans and Tk 17,812 crore on interest payments on foreign loans.
The overall budget allocation for this sector was Tk 1,13,500 crore. In fiscal year 2023-24, Tk 1,14,590 crore was spent on interest payments.
Officials in budget formulation of the Department of Finance said fiscal discipline has not been ensured due to decline in revenue collection for several fiscal years and the government has to take a huge loans at the end of the year.
Large volume of interest has to be calculated against domestic and foreign loans. As a result, interest payments have become the single largest burden of the operating budget.
A senior official of the Finance Ministry said foreign debt limit has been set based on the latest debt
Sustainability Analysis of the IMF mentioned as a 'medium risk' country Bangladesh is considered as a 'medium risk' country from a 'low risk' country.
This means the pressure of debt repayment has increased compared to exports and revenue income. The Finance Department estimates suggest the government's domestic and foreign debt will stand at Tk 23,42,000 crore at the end of the current fiscal year.
