The government's debt, that is the country's sovereign debt, is projected to reach Tk16.31 lakh crore billion in the next 2022-23 fiscal, before growing to Tk18.73 lakh crore in 2023-24.
According to an official document, the sovereign debt is Tk13.92 lakh crore for the ongoing 2021-22 fiscal.
In the 2023-24 fiscal, the government will get Tk11.57 lakh crore from domestic sources while Tk716,430 crore billion from external sources.
In the 2022-23 fiscal, the government will get Tk10.02 lakh crore from domestic sources while Tk628,480 crore from external sources.
In the running 2021-22 fiscal, the target was Tk867,400 crore from the domestic sources while Tk527,250 crore from external sources.
In the 2020-21 fiscal’s revised budget, the debt was Tk1.20 lakh crore with Tk748,920 crore domestic debt and Tk454,850 crore external.
The government's debt in 2019-20 fiscal was Tk1.01 lakh crore where the domestic debt was Tk631,370 crore and external was Tk374,830 crore.
The document said that the government debt has been projected to edge up in the medium term in line with the pace of economic recovery.
Outstanding debt is projected to increase by 1.3 percentage point of GDP to Tk13.9 lakh crore (Domestic vs. external ratio 1.6:1) at the end of fiscal 2021-22 from the revised target of fiscal 2020-21, as additional budget will be required for the health sector, including the cost of carrying out the vaccination program and implementing the declared stimulus packages.
Government debt has been projected to rise in the subsequent years as the economic recovery path might be slow due to the advent of new variants of the Covid-19.
The government debt has been projected to 42.9% of GDP at the end of fiscal 2023-24 where domestic debt is 26.5% of GDP and external debt is 16.4% of GDP.
The projection is 42.1% of GDP at the end of fiscal 2022-23 where domestic debt is 25.8% of GDP and external debt is 16.2% of GDP.
The official document mentioned that additional government spending for implementing the declared fiscal stimulus package to foster economic recovery from the pandemic as well as weaker than expected revenue collection have been pushing up the government debt level slightly.
Considering the present trend in the revenue collection and the resulting fiscal deficit, total debt stock is projected to increase by 2.2 percentage point of GDP to Tk12 lakh crore in the revised budget from the original budget in FY21 where both domestic debt and external debt level rises by 1.1 percentage point.
As per the document, high GDP growth, stringent fiscal discipline, low interest cost that resulted from optimum borrowing mix, and stable exchange rate have contributed in stabilizing government debt over the decade (fiscal 2010-11 to fiscal 2019-20).
Government's outstanding debt hovered around 35-36% of GDP during the decade.
It actually declined until fiscal 2017-18, but then the trend was reversed and the debt stood at 36% of GDP at the end of FY20.
Composition of the debt stock has changed as well in the last ten years.
Domestic debt increased gradually to 22.6% of GDP at the end of fiscal 2019-20 from 16.7% of GDP at the end of fiscal 2010-11.
External debt has declined gradually to 13.4% of GDP at the end of fiscal 2019-20 from 18.3% of GDP at the end of fiscal 2010-11.
