Bangladesh’s state-backed contingent liabilities for state-owned enterprises (SOEs) and autonomous bodies have reached Tk 400.12 billion, raising concerns over growing fiscal risks and pressure on public finances.
According to official estimates, the energy and power sector accounts for the largest share of sovereign guarantees, followed by Biman Bangladesh Airlines and state-run fertilizer companies. The liabilities are linked to large-scale borrowing for power plants, aircraft purchases and fertilizer imports.
A recent World Bank and Policy Research Institute (PRI) study found that inefficiencies and subsidies in SOEs cost the government about Tk 882 billion, or 1.7% of GDP, in a single fiscal year.
The Finance Ministry has introduced measures, including a 0.25% upfront fee on sovereign loan guarantees, to limit future risks. Officials said no SOE has defaulted on guaranteed loans so far.
