This was revealed by Dr. Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue (CPD) during a recent event.
Dr. Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue maintained this at a recent event in Dhaka.
Bhattacharya also shed light on the complexities of Bangladesh’s debt structure.
He said 34 per cent of Bangladesh’s revenue expenditure till July has been allocated to debt repayment.
PM’s economic adviser also attended the event.
The Centre for Policy Dialogue (CPD) is a leading think tank in Bangladesh.
Bhattacharya highlighted the complexities of Bangladesh’s debt structure at the event, held at Dhaka’s Gulshan area, which also witnessed participation of Prime Minister’s economic adviser Dr. Mashiur Rahman as the chief guest, along with other prominent figures including Dr. Salehuddin Ahmed, former governor of Bangladesh Bank, and Dr. Fahmida Khatun, executive director of CPD.
Bhattacharya underscored the severity of the situation, noting that 34 per cent of Bangladesh’s revenue expenditure till July has been allocated to debt repayment, with 28 per cent for domestic debt and 5 per cent for foreign debt.
This marks a significant increase from 26 per cent to 34 per cent over three years, largely attributed to accelerated borrowing trends since 2018-19, influenced by the COVID-19 pandemic and the Russia-Ukraine war.
The heightened debt burden has raised concerns about Bangladesh’s debt servicing capacity, with the revenue budget now stretched to the extent that it cannot finance any development projects, as emphasised by Bhattacharya.
Reflecting on the broader implications of debt repayment, he criticised policymakers’ dismissive attitude towards economists’ warnings, stressing the anticipated challenges in debt repayment starting from 2025 and escalating in 2026.
Bhattacharya also highlighted the significance of private sector debt, with government loans accounting for 80 per cent of total borrowing and called for greater scrutiny of personal loans and their utilisation.
Combining foreign and domestic debts, he underscored the burden of per capita liability, which stands at $310 for foreign debt alone and rises to approximately $850 when domestic debt is considered.
This comprehensive analysis underscores the urgent need for fiscal prudence and strategic planning to address Bangladesh’s debt challenges.
Fibre2Fashion News Desk (DR)
