Debt and Deficit: Trends and Challenges

Monthly Bangladesh Economic Update, March 2017

March 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its monthly publication of the ‘Bangladesh Economic Update’ March 2017, reveals that persistently increasing outstanding debt along with high debt-service payment every year is likely to lower development finance and escalate intergenerational debt burden in the future.

The research organisation in its eighth year of this monthly publication notes that at the end of FY 2015-16, the total outstanding domestic debt has increased by 17.7 percent while the total outstanding external debt burden increased by 10.1 percent. However, during the period of July-January of FY 2016-17, total outstanding domestic debt increased by 18.21 percent while foreign aid decreased by 16.53 percent compared to the corresponding period of FY 2015-16.

The debt-gross domestic product (GDP) ratio is on the rise since FY 2012-13. Statistics suggest that the outstanding domestic debt as percentage of GDP was 15.11 percent in FY 2012-13, 15.12 percent in FY 2013-14, and 15.23 percent in FY 2014-15, and 15.55 percent in FY 2015-16. In the first seven months of the current fiscal year (July-January of FY 2016-17), the ratio increased to 14.35 percent in compared to 13.76 percent in the corresponding period of FY 2015-16.





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