UNB, Dhaka :
Unnayan Onneshan (UO), an independent multidisciplinary think-tank, opined that increases in per capita debt, share of debt in GDP and debt service payment have been lowering public spending in physical and socio-economic infrastructure and escalating intergenerational debt burden in the future.
The research organisation, in its October issue of Bangladesh Economic Update 2014, noted that in FY 2013-14, the per capita external debt burden increased by 2.41 percent and per capita domestic debt burden increased by 10.71 percent compared to the previous FY 2012-13.
During the period from FY 2011-12 to FY 2012-13, the debt service payment increased by 12.58 percent.
The outstanding domestic debt as percentage of GDP was 17.46 percent, whereas the outstanding external debt was 18 percent in FY 2012-13, it said.
The domestic debt stood at Tk. 202044 crore in FY 2013-14, which was Tk. 181184 crore, 160423 crore and 139220 crore in FY 2012-13, FY 2011-12 and FY 2010-11 respectively, it said.
The external debt has increased by USD 296 million in FY 2013-14 compared to FY 2012-13, whereas the debt increased by USD 9.7 million in 2012-13 compared to the previous fiscal year, it added.
The think tank further observed that the foreign debt-service payment is increasing over the years, which indicates a decrease in the net foreign asset of the country.
Increasing allocation for non-development expenditure due to financing the deficit does not allow the government to allocate adequately for development expenditure resulting in barrier to the expansion of productive capacity in the economy, the Economic Update said.
In order to check the ominous effects of debt and deficit, the UO urges for the adoption of an immediate debt management policy through harmonisation of the macroeconomic policies that ensures an effective fiscal management in the economy.
