The pressure of foreign debt repayment is increasing day by day. The government is facing financial crisis to meet the interest and principal of the loan. Being forced to pay off the old debt burden turns to new debt. On the one hand, taking excessive loans, on the other hand, the government is not able to get out of the circle of pressure due to the fall in the value of the rupee against the dollar.

In such a reality, the foreign debt interest will have to be paid in the financial year 2024-25 Tk 20 thousand 500 crore. It is 4 thousand 700 crore more than the last financial year. According to the revised budget of the last financial year, the total expenditure of the government on interest on foreign loans stands at 15 thousand 800 crores. In the financial year 2022-23, 9 thousand 437 crores were paid for this. That is, within four years, the interest payments on foreign loans are almost doubling.

On the other hand, the statement of the ‘Medium Term Macroeconomic Policy’ published by the Finance Department of the Ministry of Finance has said that in the current financial year, the original foreign debt of 262.9 million dollars or 30 thousand 759 crores of debt has to be paid. For the fiscal year 2023-24, 247 crore 70 million dollars are expected to be paid, which is 28 thousand 981 crores in rupees. That is, in one year, the actual repayment of foreign debt is increasing by 15 million 20 million dollars. This is almost $1 billion more than the 2022-23 fiscal year. In that fiscal year, principal repayments of $1.744 billion were made, which was $210 million in the fiscal year 2021-22. In total, the government has to pay 51 thousand 259 crores in the current financial year as interest and principal on foreign loans.

In the budget of the current financial year, foreign debt interest payment is mentioned as 20 thousand 500 crore taka or 175 crore dollars. This $1.75 billion in interest and approximately $2.63 billion in principal will pay $4.38 billion in the current fiscal year, which is $102 billion more than last fiscal year.

Prof. Mostafizur Rahman, honorary fellow of the research organization Center for Policy Dialogue (CPD) told Samakal, “ambiguity is not desirable as debt repayment.” There is no benefit from this. Rather, if the issues are clear, it is easy to have an idea about the debt situation.

The latest report of the Economic Relations Department (ERD) of the Ministry of Finance, analyzing the trend of foreign debt repayment, shows that the interest expenditure is increasing more than the loan origination. Interest payments increased by 42 percent in the 11 months from July to May last financial year.

External debt service pressures are mentioned in the monetary policy statement, although external debt service levels are gradually increasing. However, it is expected to remain within tolerable limits as a result of the government’s efforts to diversify funding sources and build foreign exchange reserves.
Professor Mostafizur Rahman said, “The government is actually in a dilemma regarding economic management. Borrowing from domestic sources will lead to a shortage of funds for investment in the private sector. Taking foreign loans will increase the repayment pressure. Care must be taken in taking foreign loans, so that the repayment pressure is not unbearable.