The government’s borrowing from the banking system declined significantly in the past three months when loan repayment increased remarkably, driven mainly by higher revenue earnings and fund flow from overseas. The government borrowing in the recent time reached at its peak at Tk 22,400 crore on November 21 last year, exceeding its fiscal target of Tk18,957 crore.

Bangladesh Bank (BB) data for mid-February, however, showed the government trimmed down the amount to a comfortable level by repaying Tk 6,023 crore until February 15 when the net state borrowing was Tk 15,377 crore. Of this amount, the borrowing from the central bank was Tk 6,558.25 crore and from commercial banks Tk 8,818.75 crore.

“The trend of government borrowing declined mainly on strong revenue growth coupled with the higher fund flow from overseas,” BB economic adviser Dr. Md. Akhtaruzzaman told BSS on Thursday.

The National Board of Revenue (NBR) posted over 16 per cent increase in the revenue earning in the first half of the current 2011-12 fiscal. The July-December revenue earning was recorded at Tk 39,090.82 crore, which was Tk 150.53 crore more than the target of Tk 38,940.29 crore for the period.

The revenue department is expecting 21.52 per cent growth at the end of the fiscal year to achieve the target of Tk 91,870 crore for the financial year, which will bring the government borrowing further down.

Similarly, the fund flow from overseas rose to US$ 423 million in January this year, which was only US$ 65 million in December.

Besides these positive improvements, Aktaruzzaman said, the government bonds, which matured in the recent months, helped substantiality to adjust government debt from the banking system.

The Independent/Bangladesh/ 23th Feb 2012