Bangladesh has paid a record $4.13 billion in foreign debt servicing during the first 11 months (July"May) of the current fiscal year, underscoring mounting pressure on the country’s external finances amid rising repayment obligations and slowing inflows of fresh foreign loans.
According to the latest data released by the Economic Relations Division (ERD) on Tuesday, the repayment bill"equivalent to more than Tk 50,515 crore"marks the highest level of external debt servicing in the nation’s history.
The figures show that Bangladesh repaid US$2.68 billion in principal and US$1.45 billion in interest to development partners and creditor nations during the period. A substantial share of the payments went to major lenders, including the World Bank, the Asian Development Bank (ADB) and Japan.
The surge in debt servicing comes as foreign aid inflows are increasingly being offset by repayment obligations. During the July"May period, Bangladesh received approximately US$4.58 billion in external assistance, comprising US$4.14 billion in loans and US$430 million in grants. The narrow gap between fresh disbursements and repayments highlights the growing strain on the country’s external financing position.
Bangladesh’s foreign debt burden has risen steadily over recent years. In the previous fiscal year, the country crossed the US$4 billion mark in annual external debt servicing for the first time, repaying US$4.09 billion in principal and interest. In FY2023-24, total repayments stood at US$3.37 billion.
Officials and economists warn that if the current trend continues, Bangladesh’s external debt-servicing bill could exceed US$4.5 billion by the close of the fiscal year, setting yet another record.
At the same time, the flow of new foreign loan commitments has weakened. ERD sources said Bangladesh secured fresh loan commitments worth US$4.22 billion during the first 11 months of the fiscal year, down sharply from more than US$5.5 billion during the corresponding period a year earlier.
Among development partners, the World Bank emerged as the largest disburser, releasing nearly US$960 million. Russia followed with US$930 million, while the ADB disbursed around US$780 million.
China released US$530 million during the period, while Japan provided US$430 million and India US$250 million.
Bangladesh depends heavily on foreign loans and grants to finance public-sector development projects and support budget implementation.
In addition to project financing, development partners provide budgetary assistance, while private-sector enterprises secure external funding for investment and infrastructure ventures.
The latest ERD data paint a challenging picture for policymakers, as rising debt-servicing costs increasingly absorb foreign financing inflows, while new loan commitments lose momentum. The trend is expected to intensify pressure on foreign exchange resources and fiscal management in the coming years.
