Govt’s debt outpacing revenue growth: BB

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

“The government debt-to-GDP ratio increased modestly, while the government debt-to-revenue ratio rose further, mainly due to higher accumulation of debt relative to revenue generation,” said the Bangladesh Systemic Risk Report for July-December 2025.

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In fiscal year 2020-21 (FY21), the government’s aggregate debt was about 3.3 times its annual revenue; by FY25, that ratio had risen to about 4.5 times, the report said.

In other words, for every Tk 100 in government revenue, aggregate government debt stood at roughly Tk 330 in FY21, rising to about Tk 450 by FY25.

The government debt-to-GDP ratio, meanwhile, increased from roughly 32.7 percent in FY21 to 35.3 percent in FY25.

The debt-to-revenue ratio indicates the government’s debt burden relative to the resources it mobilises through revenue. Aggregate debt, which includes both domestic and external debt, remained higher than government revenue throughout the period, the report noted.

The widening gap comes against the backdrop of Bangladesh’s persistently weak revenue mobilisation.

The International Monetary Fund’s (IMF) latest debt sustainability analysis also identified low revenue mobilisation and rising domestic debt as key vulnerabilities for the country’s debt-servicing capacity.

Tax revenue declined to 6.8 percent of GDP in FY25 from 7.4 percent in FY24, according to the IMF, which attributed the weak performance to structural problems including a narrow tax base, low compliance, and inefficiencies in tax administration.