The government's debt is projected to gradually increase over the next two fiscal years, following the trend of the previous two years.
The projected debt will stand at 37.6% and 38.5% of the GDP in FY25 and FY26 respectively, according to an official document of the Ministry of Finance.
The debt amount is estimated at Tk2,118,000 crore for FY25, while for FY26, it is set to rise to Tk2,438,800 crore.
The figures were Tk1,832,900 crore (36.6% of GDP) and Tk1,569,700 crore (35.1% of GDP) for FY24(ongoing) and FY23 respectively.
The domestic debt for FY25 is projected at Tk1,307,100 crore (23.2% of GDP), constituting 61.7% of the total debt.
Meanwhile, external debt is expected to reach Tk810,900 crore (14.4% of GDP), making up 38.3% of the total.
For FY26, the domestic debt is forecasted at Tk1,497,200 crore (23.2% of GDP), representing 61.7% of the total debt.
A finance ministry document says that an expansionary fiscal policy will persist in the medium term until FY25 to aid in recovering from the adverse effects of the COVID-19 pandemic.
As a result, the debt-GDP ratio is expected to rise from 32.4% in FY21 to 38.5% in FY26.
Both domestic and external debt stocks, as a percentage of GDP, will continue to grow in the medium term.
Notably, the external debt stock is projected to increase at a faster pace relative to domestic debt, according to the document.
By the end of FY26, the external debt stock is estimated to reach 14.8% of GDP, making up 38.6% of the total debt stock.
According to the Finance Ministry document titled “Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26)”, as of the end of FY22, the debt portfolio in Bangladesh was primarily composed of domestic debt, which constituted 64% of the total debt stock.
Marketable securities made up 50% of the domestic debt, while National Savings Certificates (NSCs) contributed 43%, with the remainder financed through the provident fund.
Recent years have seen a shift in the external debt stock's relative share, with more than two-thirds of external debt now being multilateral.
Despite this, new bilateral creditors have emerged, offering semi-concessional loans.
Over the last 15 years, the total debt-to-GDP ratio in Bangladesh has never exceeded 40%.
A notable development by the Finance Division is the exercise of a home-grown Debt Sustainability Analysis (DSA) using national data, marking a significant milestone for the country.
Previously, Bangladesh relied on DSAs conducted by the IMF and World Bank.
The new analysis was based on the DSA-LIC template provided by the IMF and World Bank, with additional technical support from these institutions.
The findings demonstrate that the country's public debt is sustainable and well within safe thresholds, even in the face of extreme scenarios.
