Govt debt rising faster than revenue growth, says Bangladesh Bank

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Bangladesh’s government debt is growing faster than its revenue base, widening the gap between accumulated debt and the state’s annual revenue collection capacity, according to a latest Bangladesh Bank report.

The Bangladesh Systemic Risk Report for July-December 2025 said the government debt-to-GDP ratio increased slightly, while the debt-to-revenue ratio rose further due to higher debt accumulation compared with revenue growth.

The report said government debt was around 3.3 times the annual revenue in fiscal year 2020-21. By FY25, the ratio had increased to about 4.5 times.

In practical terms, for every Tk 100 collected in government revenue, total government debt increased from around Tk 330 in FY21 to nearly Tk 450 in FY25.

The government debt-to-GDP ratio also increased from approximately 32.7 percent in FY21 to 35.3 percent in FY25.

The report noted that the debt-to-revenue ratio indicates the government’s debt burden compared with the resources it collects through revenue. Total government debt, including domestic and external borrowing, remained higher than annual revenue throughout the period.

The rising debt burden comes amid persistent challenges in revenue collection. The International Monetary Fund (IMF) has identified weak revenue mobilisation and increasing domestic debt as major risks to Bangladesh’s debt management capacity.

The IMF said tax revenue declined to 6.8 percent of GDP in FY25 from 7.4 percent in FY24, mainly due to structural challenges including a narrow tax base, low compliance and inefficiencies in tax administration.