The government will pay an estimated Tk225,670 crore as interest on loans in the next three fiscal years including the current one.
Of the amount, Tk63,800 crore will be paid in 2020-21, Tk74,890 crore in 2021-22, and Tk86,980 crore in 2022-23.
An official document showed that the government has allocated Tk58,250 crore for paying the interest for the running fiscal on loan taken from domestic resources. The amount is Tk68,080 crore for the next fiscal and Tk78,890 crore for 2022-23.
For interest on loans taken from external sources, the government will pay Tk5,530 crore in the 2020-21 fiscal, Tk6,810 crore in 2021-22, and Tk8,090 crore in 2022-23.
The government in 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 fiscal years paid Tk30,970 crore, Tk33,110 crore, Tk35,380 crore, Tk41,770 crore, Tk49,460 crore and Tk57,660 crore respectively as interest of loans.
Of the amount, Tk29,440 crore, Tk31,470 crore, Tk33,540 crore, Tk38,160 crore, Tk46,010 crore and Tk52,800 crore were paid for domestic loans for 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 fiscal years respectively. Tk1,540 crore, Tk1,650 crore, Tk1,840 crore, Tk3,610 crore, Tk3,450 crore and Tk4,870 crore were paid for foreign loans' interest of those stipulated fiscal years.
According to the document, due to the higher amount of concessional loans, Bangladesh is historically getting external financing with lower expenses. The outer financing average interest rate for the 2014-15 fiscal year to 2018-19 fiscal year was 1% while the expenditure for the interest repayment was 0.8% of the budget.
But due to the sliding down of grants and sliding up of loans the expenditure of interest repayment has slightly increased against external loans.
The interest rates for loans taken from external sources was 0.7%, 0.8%, 0.9%, 1.4%, 1.2% and 1.4% for 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 fiscal years respectively.
As per the document, interest rates for the same kind of loans will be 1.4%, 1.4% and 1.5% for 2020-21, 2021-22 and 2022-23 fiscal years.
It mentioned that the interest payment for loans taken from internal sources was downed 2.3% comparing 2014-15 fiscal year and 2018-19 fiscal year due to some government reforms.
The interest rates for 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 fiscal year for the loans taken from internal sources was 10.6%, 10%, 9.3%, 9.2%, 9.4% and 9.1% respectively.
As per the document, the interest rates for the same kind of loans will be 8.6%, 8.6% and 8.8% for 2020-21, 2021-22 and 2022-23 fiscal years.
It stated that the internal sources remain as the main source of deficit financing for the government.
Although the interest rate against the external sources jumped slightly, the overall cost for interest payment slide down 2.2% comparing 2014-15 fiscal year and 2018-19 fiscal year.
