REJAUL KARIM BYRON and ASIFUR RAHMAN

The government’s total outstanding debt has increased by 2.93 percent in the first six months of the current fiscal year till December 2024 and reached Tk 1,944,171 crore, which is increasing the pressure of debt servicing in the budget.

The outstanding debt, both local and external, is increasing gradually. It was Tk 1,344,443 crore till June 2022 and reached Tk 1,888,787 crore till June 2024.

Of the total outstanding debt, foreign loans accounted for about 43 percent or Tk 836,658 crore till December last year. It was Tk 495,793 crore in June 2022.

According to the Quarterly Debt Bulletin released yesterday, the government planned to focus on increasing reliance on the domestic debt market to reduce foreign currency exposure risks in the medium term.

“But, as the liquidity position in the financial market remains tight, there will be some challenges to implement the strategy,” it said.

Bangladesh still has access to concessional external financing and prefers this mode of financing, inclusive of concessional and non-concessional terms, said the bulletin.

It said the country has been gradually facing exposure to non-concessional loans by official creditors due to persistent economic development and higher per capita income in recent times.

Moreover, it said, the cost of borrowing from commercial lenders has been increasing due to global monetary tightening, high domestic inflation and depreciation of the local currency.

It is expected that inflation would decrease substantially in the next fiscal year, and the currency exchange rate would be stabilised due to the current initiative by the central bank.

According to the bulletin, the majority of the external debt is denominated in US dollars, which accounts for around 53 percent of the “…