Bangladesh’s public debt has crossed Tk22 lakh crore by December 2025, reflecting a continued shift toward domestic borrowing as the government seeks to reduce exposure to foreign exchange volatility, according to the latest quarterly bulletin from the Ministry of Finance.
The report shows that total government debt stood at Tk18.9 lakh crore in June 2024, just before the interim administration assumed office, and has since risen significantly. Of the overall increase, around Tk3 lakh crore was borrowed during the interim period. In comparison, the debt level was Tk13.44 lakh crore in June 2022.
A clear trend towards domestic financing has emerged over this period. By December 2025, domestic debt reached Tk12.5 lakh crore, while external debt stood at Tk9.59 lakh crore. Domestic and foreign liabilities now account for 57 per cent and 43 per cent of total public debt respectively.
During July-December of the current fiscal year, total government borrowing increased by Tk62,428 crore, marking a 13 per cent rise compared to the same period last year. However, the composition of borrowing shifted sharply - foreign loans fell by 59 per cent to Tk10,130 crore, while domestic borrowing surged by 70 per cent to Tk52,298 crore. A significant portion of domestic funds came from the central bank, amounting to Tk19,470 crore.
Most domestic borrowing was raised through government securities, with the finance ministry noting a growing preference for long-term instruments.
At the same time, interest payments also rose sharply. Total interest expenditure increased by 22 per cent to Tk71,253 crore, with domestic debt servicing alone rising 25 per cent to Tk61,866 crore.
The ministry acknowledged concerns about potential “crowding out” of private investment but argued that current market conditions - characterised by strong liquidity in banks, lower yields on government securities, and weak private credit demand - have created room for sustainable domestic borrowing.
It added that this strategy is helping build a more stable and self-reliant fiscal framework, supported by internal financial resources rather than heavy reliance on external debt.
