Government debt stock rises to Tk 22 trillion by March

Bangladesh’s total government debt stock increased by more than 5.4 per cent in the first nine months of fiscal year 2025-26, reaching Tk 22.59 trillion, largely due to a rise in domestic borrowing, particularly from the banking sector.

According to data released by the Finance Ministry on Thursday, domestic debt rose 8.41 per cent to Tk 12.954 trillion by the end of March from the level recorded at the beginning of the fiscal year.

Borrowing from the banking system made up the largest portion of domestic debt, increasing by nearly 14 per cent to Tk 8.82 trillion by the end of March. The rise indicates the government’s growing dependence on banks to finance its budget deficit.

Meanwhile, borrowing from non-bank sources, including National Savings Certificates (NSCs), fell 1.46 per cent to Tk 4.14 trillion during the period, reflecting weaker mobilisation through retail savings instruments.

External debt, in contrast, grew at a much slower pace, rising 1.5 per cent to Tk 9.637 trillion as of March 2026 from the level recorded in July 2025.

The increased dependence on domestic borrowing has also raised the government’s debt-servicing burden, including both principal and interest payments.

Total interest expenditure surged 29 per cent year on year during the first three quarters of FY2025-26. Interest payments on domestic debt rose even more sharply, climbing 34 per cent year on year through March 2026, driven by higher borrowing volumes and elevated interest rates.

By comparison, interest payments on external debt increased by a relatively modest 4 per cent year on year during the period ending March 2026.