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The government’s borrowing from the banking sector surged to Tk 1.40 lakh crore in fiscal year 2025-26, exceeding the revised target by nearly Tk 22,000 crore as a substantial revenue shortfall and rising expenditure widened the fiscal deficit.
According to Bangladesh Bank data, the government’s bank borrowing stood at Tk 1.40 lakh crore against a revised target of Tk 1.18 lakh crore.
The original FY26 budget had set the borrowing target at Tk 1.04 lakh crore, which was later revised upward due to increased financing needs.
Economists attributed the higher borrowing to a revenue shortfall of nearly Tk 88,000 crore, rising operational expenditure and increased development spending.
They cautioned that sustained dependence on bank borrowing could eventually crowd out private-sector credit, although weak private-sector demand during FY26 helped ease pressure on the banking system.
Preliminary data from the National Board of Revenue (NBR) showed that revenue collection reached Tk 4.15 lakh crore in FY26, falling significantly short of the Tk 5.03 lakh crore target despite recording more than 12 percent year-on-year growth.
Economists urged the government to strengthen tax administration, improve revenue mobilization and increase the use of low-cost external financing to ensure long-term fiscal sustainability.