The government has slashed its bank borrowing target for the current fiscal year by 28%, or Tk 385 billion, citing lower expenditures and slow implementation of the Annual Development Programme (ADP).

Under the revised target, the government will borrow Tk 990 billion by June 2025, down from the initial projection of Tk 1,375 billion. However, the Bangladesh Bank estimates actual borrowing may not exceed Tk 900 billion.

A senior central bank official stated that monetary and credit projections for the second half of FY 2024-25 have been adjusted accordingly, while the private sector credit growth target remains at 9.8%.

Government borrowing has been influenced by sluggish ADP implementation, with only 18% completed in the first half of FY’25, compared to 22.48% in the same period last year. Political unrest and lower operational costs of the interim government also contributed to reduced borrowing needs.

The government borrowed Tk 689 billion from banks in the first seven months of FY’25 but repaid Tk 553.6 billion, bringing net borrowing down to Tk 136 billion. A private bank executive noted that reduced government borrowing could ease liquidity conditions and lower interest rates.

Meanwhile, the government’s ways-and-means advances (WMAs) stood at Tk 106.27 billion, with no overdraft drawings recorded.