The government has proposed to borrow Tk 1.04 lakh crore from the banking system in the upcoming financial year 2025-26, marking a 5-per cent increase from the revised bank borrowing target of Tk 99,000 crore for the current financial year.
The borrowing plan was disclosed by finance adviser Salehuddin Ahmed during a pre-recorded budget speech aired on Monday, in which he presented the proposed national budget of Tk 7,89,999 crore for FY26.
According to budget documents, the total budget deficit for FY26 is projected at Tk 2,21,000 crore.
Of this, nearly 47 per cent 鈥� equivalent to Tk 1.04 lakh crore 鈥� is expected to be financed through borrowing from the banking sector.
Of the deficit, the government expects to secure Tk 96,000 crore from external sources, while the remaining Tk 1,25,000 crore will be financed domestically.
Within this domestic component, Tk 21,000 crore is targeted to come from non-bank sources, including Tk 12,500 crore from sale of national savings certificates.
Data from the Bangladesh Bank showed that between July 2023 and May 21, 2024, the government has already borrowed about Tk 60,000 crore from the banking system.
The rising dependence on bank borrowing has raised concerns among economists, as it could crowd out private sector credit and increase pressure on inflation and liquidity.
The increased reliance on the banking sector underscores the government鈥檚 challenge in mobilising adequate revenue and external financing to bridge the growing fiscal gap in an economy grappling with inflationary pressure and a slowdown in foreign aid disbursement.
