Foreign Debt Repayment Tops $3.5b in Nine Months

Bangladesh’s foreign debt servicing pressure continues to rise, with over $3.5 billion paid in principal and interest to development partners, including the World Bank, Asian Development Bank (ADB), and Japan, during the first nine months (July–March) of the current fiscal year.

The repayments are increasing alongside growing foreign loan disbursements, highlighting the country’s rising debt servicing burden.

According to the latest report released by the Economic Relations Division (ERD) on Thursday, Bangladesh repaid $3.525 billion to various lenders and countries during the period. In the same timeframe, the country received $3.89 billion in foreign loans and grants.

The government relies on external borrowing to finance development projects under the Annual Development Programme (ADP), while the ERD maintains the overall loan records.

Domestic borrowing has also surged, particularly from the banking sector. To cover the budget deficit, more than Tk 1 trillion was borrowed from banks in the first nine months of the fiscal year. After partial repayments, the outstanding domestic debt now stands at around Tk 930 billion, adding further pressure on public finances.

Officials say foreign debt repayments have been rising steadily for several years. In the previous fiscal year, repayments crossed $4 billion for the first time, reaching $4.09 billion, up from $3.37 billion a year earlier. If the current trend continues, total repayments could exceed $5 billion this year.

The ERD data shows that of the $3.525 billion repaid so far this fiscal year, $2.276 billion was principal and $1.25 billion was interest. During the same period, new loan inflows stood at $3.5 billion, along with $380 million in grants.