Domestic debt has risen nearly 16 times over the past two decades, while non-performing loans (NPLs) in the banking sector have surged to a record Tk 644,000 crore, the finance minister told Parliament while unveiling the FY2026–27 budget on Thursday.
Presenting a Tk 938,000 crore national budget in the parliament—one of the largest in the country’s history—Finance Minister Amir Khasru Mahmud Chowdhury said the economy is under “multidimensional pressure” due to “long-term mismanagement, corruption, financial sector weaknesses and wrong policies.”
He also compared key macroeconomic indicators between earlier BNP-era benchmarks and the current period.
Debt and interest burden surge
According to the finance minister, domestic debt stood at Tk 65,000 crore in 2006 and rose to Tk 1,077,000 crore in 2024—an increase of nearly 16-fold.
External debt also climbed from Tk 130,000 crore in 2006 to Tk 812,000 crore, about 6.5 times higher.
Interest payments increased sharply from Tk 8,500 crore in FY2005–06 to Tk 114,700 crore in FY2023–24—more than a 13-fold rise.
Banking sector stress deepens
The NPL ratio rose from 13.6% in December 2005 to 35.73% in the first quarter of FY2025–26.
Total non-performing loans now stand at about Tk 644,000 crore, posing what economists describe as a major risk to financial stability.
Capital adequacy in the banking sector has also deteriorated, falling from 7.3% in 2005 to -2.64% by the end of 2025.
Growth slows, inflation accelerates
GDP growth fell from 6.78% in FY2005–06 to 4.22% in FY2023–24 and further to 3.49% in FY2024–25.
Inflation rose from 7.17% in FY2005–06 to 11.66% in July 2024, increasing pressure on household budgets, particularly for lower- and middle-income groups, the finance minister said.
Inequality rises, investment weakens
The Gini coefficient increased from 0.467 in 2005 to 0.499 in the 2022 survey, indicating widening income inequality.
Private sector credit growth slowed from 18.3% in FY2005–06 to 6.5% in FY2024–25, signalling weaker private investment and job creation.
Trade slowdown and currency depreciation
Export growth stood at 21.6% and import growth at 12.2% in FY2005–06, but both recorded negative growth in FY2023–24.
The taka depreciated from Tk 68 per US dollar in 2006 to Tk 122 in FY2023–24, raising import costs, debt servicing pressures, and inflationary risks.
Risk status downgraded
Citing IMF and World Bank assessments, the finance minister said Bangladesh is no longer classified as a “low-risk” economy, with its risk profile now at the “medium” level due to rising debt vulnerabilities.
Tk 243,000 crore budget gap
For FY2026–27, the government has proposed a Tk 938,000 crore budget with a revenue target of Tk 695,000 crore, leaving a deficit of Tk 243,000 crore.
The gap will be financed through domestic and foreign borrowing, the finance minister said.
He added that the government’s priorities include banking sector reform, inflation control, investment expansion, job creation, and improved governance. However, the data presented in the budget highlights persistent challenges from rising debt and weaknesses in the financial sector.