Bangladesh Repays Record $4.49b in Foreign Debt in FY26

Bangladesh repaid a record US$4.494 billion in external loans, including both principal and interest, during the 2025�"26 fiscal year, marking the highest annual foreign debt repayment in the country's history.

The latest data on foreign loan commitments, disbursements and repayments were released on Sunday by the Economic Relations Division (ERD).

According to the ERD, Bangladesh repaid $4.494 billion in external debt during FY26, surpassing the previous record of $4.09 billion repaid in FY25.

Officials and economists say the country's growing external debt obligations are placing increasing pressure on the economy.

ERD data show that Bangladesh repaid an average of more than $375 million per month over the July�"June period. Of the total repayment, $2.95 billion was principal, while $1.54 billion was paid as interest.

Despite the sharp rise in debt servicing, both foreign loan commitments and disbursements declined during the fiscal year.

Foreign loan commitments fell to $8.32 billion, while actual loan disbursements amounted to $8.07 billion during FY26.

Among development partners, the World Bank remained the largest lender, disbursing $2.07 billion. The Asian Development Bank (ADB) ranked second with $1.91 billion, while Russia was the third-largest disbursement source, providing $1.05 billion.

However, although China and India continued disbursing funds under existing projects, neither country made any new loan commitments during the fiscal year.
Bangladesh's external debt servicing has risen sharply over the past decade.

According to ERD statistics, the country repaid only $1.10 billion in foreign loans during FY2012�"13. Nearly a decade later, repayments increased to $2.01 billion in FY2021�"22, before climbing to nearly $3 billion in FY2022�"23.

By FY2025�"26, annual external debt repayment had reached nearly $4.5 billion, representing an increase of more than four times over the past 14 years.

The repayment burden is expected to rise further in the coming years as grace periods for several major infrastructure loans expire.

These include loans for the Rooppur Nuclear Power Plant, the Third Terminal of Hazrat Shahjalal International Airport, financed largely by Japan, as well as repayment obligations that have already begun for the Karnaphuli Tunnel and Dhaka Metro Rail projects.

ERD officials said the repayment pressure is increasing as grace periods for several large-scale infrastructure and mega-project loans come to an end, requiring Bangladesh to begin regular repayment of both principal and interest.