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Bangladesh's fiscal deficit rose to approximately 0.7 per cent of GDP, or Tk 387.72 billion, in the first five months (July-November) of the current fiscal year in a rise from last year's 0.03 per cent, according to official statistics.
The surge in interest payments has significantly strained public finances, thereby raising concerns about debt sustainability.
Interest payment, a major component of operating expenditure, stood at Tk 712.13 billion, nearly 460 per cent higher than a year earlier.
Of the amount, Tk 636.2 billion was spent on domestic interest payments, while foreign interest payments stood at Tk 75.9 billion.
Government spending on general public services also saw a sharp rise, reaching Tk 308.97 billion, up 156 per cent from the same period last year.
Subsidy expenditure surged by more than 89 per cent to Tk 279.79 billion.
During the July-November period, total government spending stood at Tk 1.979 trillion, marking a 25-per cent increase from the same period last year.
However, total revenue collection only grew 1.7 per cent, reaching Tk 1.592 trillion.
Among revenue sources, tax revenue declined by nearly 3.0 per cent, amounting to Tk 1.30 trillion.
In contrast, non-tax revenue comprising different government fees, levies and penalties rose by nearly 26 per cent to Tk 284.51 billion during the period under review. Development expenditure, including the annual development programme, declined to Tk 247.37 billion, a 27-per cent drop from the same period last year. Meanwhile, spending on food increased sharply to Tk 43.23 billion, up 87 per cent year on year as the government beefed up its stock to combat price surges of the key staples.
"For FY25, the actual overall balance up to November 2024 shows a negative value of 0.69 per cent of GDP (gross domestic product)," according to a finance ministry report.
"As of November in FY25, net foreign borrowing is negative, while domestic borrowing remains positive. Overall, the total financing stands at 0.68 per cent of GDP." For FY25, the budget deficit (excluding grants) is projected at 4.53 per cent of GDP, while the deficit including grants is expected to be 4.46 per cent.