Bangladesh government’s domestic borrowing fell by 63% in July 2025 compared to the same month last year as slower government spending reduced financing needs at the start of the fiscal year, according to Bangladesh Bank data.
Net domestic borrowing for July stood at Tk 8,526.6 crore, a sharp drop from Tk 23,202.8 crore in July 2024.
The amount represents just 6.8% of the Tk 1.25 lakh crore borrowing target set for the fiscal year. The annual target includes Tk 1.04 lakh crore from banks and Tk 21,000 crore from non-bank sources, with Tk 12,500 crore expected from national saving certificates.
The steepest decline was seen in borrowing from the banking system. Net borrowing from banks dropped significantly to Tk 2,567.8 crore in July 2025, compared with Tk 18,909.0 crore in the same period last year.
Bangladesh Bank officials stated that the decrease in borrowing reflected the repayment of earlier liabilities and the slower pace of government expenditure in the early months of the fiscal year.
However, borrowing from non-bank sources saw an increase. In July 2025, it rose to Tk 5,958.8 crore, compared to Tk 4,293.7 crore in July 2024.
The government raised Tk 4,665.4 crore through treasury bills and bonds, while national saving certificates saw net sales of Tk 1,293.5 crore, with Tk 7,915.5 crore in sales and Tk 6,622.0 crore in repayments.
The composition of the government’s financing also shifted.
While more than 80% of borrowing came from banks in July 2024, around 70% of the borrowing in July 2025 was sourced from non-bank entities.
A senior Bangladesh Bank official said the lower borrowing in July does not indicate a reduced financing requirement for the fiscal year. It is mainly the result of slower expenditure rollout.
“As development projects and regular spending accelerate in the coming months, borrowing is expected to rise and likely reach the target,” he added.
