The interim government has decided to significantly increase its reliance on domestic sources, particularly bank loans, to finance the budget deficit for the upcoming FY2025- 26.
The proposed national budget slashes borrowing targets from foreign sources and savings certificates, instead aiming to collect Tk1,04,000 crore from the banking sector, marking an almost 5% increase from the revised target of Tk99,000 crore in FY2024-25.
Finance Adviser Dr Salehuddin Ahmed presented the proposed budget for the 2025-2026 fiscal year, amounting to Tk7,89,999 crore, in a televised speech on Monday.
According to the budget presentation, the total budget deficit for the upcoming fiscal year is projected to be Tk 2,21,000 crore.
Of this, 47% is planned to be covered through bank borrowing, an increase from 44% in the last fiscal year.
In the first ten months of the current fiscal year, the government's net bank borrowing stood at Tk56,116 crore, which is 56.68% of the revised target. Officials antedate that the net borrowing will remain within the set limit by the end of the current fiscal year.
Conversely, the target for foreign borrowing has been reduced. As per the proposed budget, the government plans to borrow Tk96,000 crore from external sources in FY2025-26, which is approximately 8.2% lower than the revised target of Tk1.04 lakh crore for the current fiscal year.
Similarly, the government has trimmed its borrowing plans from national savings certificates. The target for the new fiscal year from this sector is set at Tk12,500 crore, a 10.7% reduction compared to the current year's revised target.
