Archive · 21 Aug 2025
Bangladesh Faces Debt Concerns Amidst Falling Tax Revenue
Bangladesh is facing economic challenges because it's not collecting enough taxes.
This leads to borrowing money, which increases debt.
The country's tax revenue is too low compared to its debt and is causing issues.
The government is cutting spending on things like healthcare and education to save money.
If this continues, the country might struggle to pay its debts, possibly slowing economic growth.
The government plans to fix this by changing tax rules, making tax collection digital, and reducing borrowing.
Bangladesh's tax revenue fell to 6.7% of GDP, below the needed 15% for sustainable growth.
Foreign debt rose 8% to $74.34 billion, while public foreign debt surged 46% in five years.
Low tax collection and rising debt are forcing spending cuts in health and education.
Experts worry the country is heading toward a debt trap due to reliance on foreign loans.
The government plans tax system reforms, digitalization, and reduced borrowing to address the issue.
- Who
- Bangladesh government, economists, and financial institutions.
- What
- Concerns over Bangladesh's growing debt and low tax revenue.
- When
- Fiscal year ending June, 2024.
- Where
- Bangladesh
- Why
- Weak tax collection and rising foreign debt threaten economic recovery and development.
Government
Economists
Tax collection automation
Government
Implement digitalization and tax reforms.
Economists
Maintained for discretionary power by keeping partial automation.
- Tax Revenue (FY24)
- 6.7% of GDP
- Foreign Debt (FY24)
- $74.34 billion
- Debt-to-GDP ratio rise
- 2.22 percentage points (year-on-year)
- Budget shortfall (FY25)
- 834.96 billion taka ($6.8 billion)
- Public Spending (FY25)
- 12.7% of GDP
- Projected debt
- $190.08 billion (by end of current fiscal year)