Govt's outstanding debt reaches Tk22.06 lakh crore: Khosru tells parliament
The finance minister says the government is prioritising higher revenue collection, greater investment and cheaper long-term financing to reduce dependence on borrowing and ensure sustainable debt management.
Highlights
- Government's outstanding debt stands at Tk22.06 lakh crore
- External debt totals Tk9.59 lakh crore
- Government targets investment-led economy, reducing borrowing dependence
- Revenue-to-GDP target set at 10.4% this fiscal year
- MTDS adopted to cut borrowing costs and manage debt
- Bangladesh repaid $4.65 billion in external loans during FY2025-26
The government's outstanding debt has reached Tk22.06 lakh crore, including Tk9.59 lakh crore in external debt, Finance Minister Amir Khosru Mahmud Chowdhury told parliament today (12 July).
Responding to a question from MP Golam Rasul during the question-and-answer session, the finance minister said the government is pursuing policies to reduce reliance on borrowing by increasing revenue collection and transitioning from a debt-driven economy to an investment-led one.
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He said the government is placing greater emphasis on boosting tax and non-tax revenues to cope with the growing burden of domestic and external debt.
"For the current fiscal year, the revenue-to-GDP ratio has been set at around 10.4%, with the primary objective of increasing revenue collection and reducing dependence on borrowing," he said.
The finance minister also said the government has adopted a Medium-Term Debt Management Strategy (MTDS) to lower borrowing costs, mitigate risks and strengthen debt management.
He said the strategy would enable more efficient management of the country's overall debt portfolio.
Referring to the policies announced in the budget for the current fiscal year, Amir Khosru said the government has launched initiatives to transform Bangladesh from a debt-dependent economy into an investment-driven one.
He said higher returns from public investment would help increase government revenue and reduce the need for borrowing to finance budget deficits.
The minister added that the government is also diversifying financing instruments to reduce interest costs, including expanding the use of sukuk and asset securitisation, alongside other alternative financing mechanisms.
While Bangladesh will continue to borrow from bilateral and multilateral development partners, the government will prioritise long-term concessional loans carrying lower interest rates and favourable repayment terms, he said.
In response to another question from MP Shahjahan Chowdhury, the finance minister said the government repaid external loans worth $4.65 billion during the recently concluded FY2025-26.
Of the total repayment, $3 billion was principal, while $1.65 billion was paid as interest, he added.
The minister said the government's election manifesto pledged to transform Bangladesh from a debt-driven economy into an investment-led one, and efforts have been underway since the government assumed office to keep external debt at a sustainable level.
He also said all externally financed projects and related loan proposals are being subjected to rigorous scrutiny before approval to ensure that unnecessary projects are not implemented using foreign borrowing.
The government is also giving priority to ensuring that externally financed projects align with its broader objectives of rebuilding and restoring the economy and implementing its election commitments, the finance minister added.
