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Debt servicing to eat up 14.5pc of FY'25 budget

FE REPORT | June 07, 2024 00:00:00

The interest payment on the government's domestic and foreign borrowing is estimated to be 7.79 per cent higher in the next fiscal year (FY 2024-25) than the revised amount of the last FY.

The government's expenditures on account of interest payments for servicing its increased borrowing both from sources see a significant rise in the proposed budget for fiscal year (FY) 2024-25.

The total amount of interest would be as high as Tk 1.135 trillion or 14.5 per cent of the Tk 7.79 trillion national budget for FY 2024-25 as proposed in parliament on Thursday. The figure was Tk 1.05 trillion in the revised target for the current fiscal year (FY 2023-24).

In the original budget of FY 2023-24, the government's overall interest payment target was set at Tk 943.76 billion.

However, the government has revised its interest payment target upward to Tk 1.05 trillion for the outgoing FY, according to the budget speech.

In the proposed budget for FY 2024-25, Tk 205 billion has been proposed as interest payment for servicing foreign debts, reflecting around 29.74 per cent hike from the revised target of the current FY.

The amount was 56.64 per cent up from the original budget of Tk 123.76 billion in the FY 2023-24.

On the other hand, the government's interest payment on account of servicing its domestic debt has been set at Tk 930 billion for next fiscal year, up from Tk 895 billion and Tk 820 billion in the revised and original targets respectively of the current FY.

The interest payment target against the government's borrowing from domestic sources was Tk 826.70 billion in the FY 2022-23.

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