Bangladesh’s government will secure an extra Tk300 billion in bank loans during the second quarter of the fiscal year to address budget deficits, primarily due to increased salary expenditures and fuel subsidies. Officials and money-market experts say the government has no other option but to rely on the banking system to meet the funding pressure in implementing the newly upgraded pay scale and financing growing subsidies on fossil fuels amid volatile global market.
The borrowing schedule appears in the government’s quarterly domestic bank-borrowing calendar for October, November, and December 2026. Over this period, it plans to raise Tk1.53 trillion through government securities, with Tk1.08 trillion from short-term treasury bills and Tk448 billion from long-term bonds. However, the government must repay Tk1.23 trillion in maturing bills and bonds, resulting in a net borrowing need of Tk300 billion.
A central bank representative, speaking on condition of anonymity, acknowledged that regulators are facilitating the auction process to fulfill fiscal requirements. They added that net government borrowing in the prior quarter (July–September) reached approximately Tk350 billion, indicating stability rather than an accelerating trend. A treasury head of a private commercial bank has said the government needs to manage funds to finance a major portion of the newly implemented pay scale while government subsidy payments for energy imports keep ballooning.
Almost half of the Tk480 billion budgeted for power and LNG subsidies in FY2026–27 has already been spent in just two and a half months. By September 20, the Finance Division had released Tk238 billion, nearly half the annual allocation, due to rising energy costs. Additionally, implementing the new pay scale will cost the government Tk370 billion by December next.
Director-General of Bangladesh Institute of Bank Management (BIBM) Dr Md. Ezazul Islam thinks the borrowing will have no immediate impact on the economy. “But it may put pressure on the government later in the form of growing interest-payment liabilities,” he added.
