Per capita debt in BD increased by 187 pc in 7-yrs

• Per capita debt in 2016 was Tk 34 thousand 53
• In 2019 it was 57 thousand 611 taka
• Per capita debt increased by 179 percent in 7 years

Staff Correspondent: The government’s debt in the domestic and foreign sectors is increasing. The development of the country is done through loans. Many times, the government has to borrow to meet the operating expenses. However, the government’s debt to GDP ratio has not yet reached dangerous levels. Bangladesh is still in a good position in terms of debt-GDP ratio compared to many countries in the world.
However, due to low revenue and dollar crisis, there are concerns about debt repayment. A significant portion of the budget is spent on loan interest payments. At present, the per capita debt of the country is more than Tk 95 thousand.
The amount of domestic and foreign debt of Bangladesh is about Tk 16.14 lakh crores. This information is known from the latest report of Bangladesh Bank (BB).
According to the information given in the latest report of the central bank, the total debt of the government in the current year, including internal and external debt, stands at Tk16 lakh 13 thousand 711 crores.
Taking into account the population of the country, the per capita debt of people stands at Tk 95 thousand 19 crores. However, income is still higher than per capita debt. The current annual per capita income of the people of the country is $2 thousand 793. Which is Tk 3 lakh 3 thousand 40 in Bangladeshi currency.
However, even if the income is high, the risk of debt is now a headache. Low revenue, the Russia-Ukraine war and the country’s trade deficit have reduced the government’s debt servicing capacity. Although Bangladesh never defaulted.
However, economists fear that the increasing rate of borrowing to meet the budget deficit may create challenges for Bangladesh in the coming days. Still, the government has resorted to more foreign borrowing to overcome the current crisis. In this, the per capita debt of the people of the country is increasing at an arithmetical rate.
The review showed that the domestic and foreign debt of the government has increased by 65 percent in just four years. And compared to 2016, the current loan amount has increased by 179 percent.
According to the report, the per capita debt in the country stands at Tk 95 thousand 19. However, currently income per capita is higher than debt.
The current annual per capita income of the country’s people is two thousand 793 dollars; Which is about Tk 3 lakh 30 thousand in Bangladeshi currency.
According to Bangladesh Bureau of Statistics, the current population of the country is 16 crore 98 lakh 28 thousand 911 people. According to this, the per capita debt of the country is Tk 95 thousand 19. In 2019, the per capita debt of people was Tk 57 thousand 611. In other words, per capita debt has increased by 65 percent in four years. And in 2016 it was Tk 34 thousand 53. Accordingly, the per capita debt has increased by 179 percent in a span of seven years.
According to the data, at the end of June 2023, the debt status of the government from Bangladesh Bank is Tk 1 lakh 58 thousand 819 crores. And the government’s debt status from commercial banks is Tk 2 lakh 39 thousand 615 crores. Apart from this, the government has taken a loan of Tk 4 lakh 17 thousand 477 crore from savings certificates and other sectors.
The review shows that the debt of the government within the country and abroad has increased several times in the last five years. During this time, government loans from Bangladesh Bank increased by 1 thousand 242 percent and from commercial banks increased by 242 percent. Apart from this, savings bonds and other sectors increased by 75 percent and foreign loans increased by 89 percent.
Economist Ahsan H Mansoor said, “Bangladesh is still in a good position in terms of debt to GDP ratio compared to many countries in the world.” But, a large part of the national budget is spent to pay the interest on the loan.
Ahsan H. Mansoor said, “Debt risk has now become a headache due to low revenue collection despite high income.” Apart from this, due to the impact of the Russia-Ukraine war and disruption of the supply chain due to the trade deficit, the government’s debt repayment capacity is decreasing.
This economist also said, ‘It is still not risky considering the ratio of debt to GDP. However, one problem is slow revenue collection and the country’s lowest tax-to-GDP ratio.
Ahsan H Mansoor said, ‘The risk factors in ensuring debt repayment capacity are – foreign exchange crisis, high rate of non-performing loans, global economic slowdown and downward trend in inward remittance flows.
The foreign debt of the government has also increased significantly. In December 2017, the foreign debt of the government was 3 thousand 886 million dollars. After five years in March 2023, which has increased to $7 thousand 353 million.
Meanwhile, the total debt of the government from domestic and foreign sources in the financial year 2014-15 was Tk 5 lakh 44 thousand 851 crores. And at the end of the financial year 2018-19, the total amount of this loan stands at Tk 8 lakh 73 thousand 235 crores. And according to the latest calculations of this year, this debt has increased to Tk 16 lakh 13 thousand 711 crores.