Not foreign loans, local ones concern Bangladesh more

Bangladesh will have to pay Tk 20,640 crore in foreign loans and interest in the current fiscal year, while its local loan payment burden is estimated to be three times higher.

According to the finance ministry, Tk 62,000 crore will have to be paid in the current financial year as interest against savings certificates and bank loans taken by the government to meet the financing needs of the different ongoing development projects.

So, Bangladesh’s foreign loan status is in no way a worrying condition, according to an analysis of the finance ministry. The finance ministry carried out the analysis to have a stocktaking of foreign loans, especially after the financial crisis in Sri Lanka and Pakistan.

The finance ministry found that crisis-hit Sri Lanka will have to pay Tk 73,960 crore in foreign loans, up by three and half times from Bangladesh. Pakistan will have to repay foreign loans worth Tk 1,08,640 crore, which is five times more than Bangladesh.

The Ministry of Finance has prepared a detailed comparative report by analysing how much foreign borrowing the government has taken so far, what is the interest rate against the loans and how much money has to be repaid annually.

There is a comparative analysis not only with Bangladesh but also with Sri Lanka and Pakistan. According to the report, Bangladesh is in a stronger position than Sri Lanka and Pakistan in terms of debt and expenditure management.

In a cabinet committee on economic affairs meeting, Finance Minister AHM Mostafa Kamal said, "Bangladesh's foreign debt to GDP ratio is in a good position, which is 38 percent.

However, in case of taking the foreign loan, we have to take less interest, he added.

Due to the crisis in Sri Lanka's economy due to foreign loans, and to assess the real position of Bangladesh, the Prime Minister held a meeting at Ganabhaban recently with the finance minister and the chairman of the National Board of Revenue to review the external debt situation.

Analysing the data, Prime Minister's Principal Secretary Dr Ahmed Kaykaus assured that Bangladesh is below the risk limit in foreign loans.

It is learned that the target for foreign borrowing in the current financial year has been set at Tk 96,738 crore. This is Tk 29,324 crore more than the last financial year. In the last financial year, foreign loans of Tk 68,414 crore were taken.