In the first seven months of the 2024-25 fiscal year (July-January), Bangladesh received a total of $3.94 billion in foreign loans, while repaying $2.42 billion, including both principal and interest payments.
The foreign debt situation has shown some improvement, with more debt being written off compared to previous years, although repayments still remain high. According to the updated report from the Economic Relations Department (ERD), the largest foreign debt came from the Asian Development Bank (ADB), providing $1.1 billion, followed by the World Bank with $880 million and Japan with $690 million.
The debt repayment includes $1.54 billion in principal and $880 million in interest. In contrast, during the same period last fiscal year, Bangladesh had to repay $1.85 billion.
However, there is a noticeable decrease in the foreign loan commitments for project assistance this year, with a promise of only $2.35 billion compared to $7.71 billion last year.
Economists have expressed concerns about the increasing pressure from foreign debt repayment, which has tripled over the past decade, significantly affecting the country's foreign reserves and budget amid an ongoing foreign currency crisis.
Economists are raising concerns about the growing pressure of foreign debt repayments in Bangladesh, as the amount the country owes has been rising steadily over the past decade. According to sources from the Economic Relations Department (ERD), Bangladesh repaid a total of $1.1 billion in foreign debt in the 2012-13 fiscal year. By 2021-22, that figure had increased to $2.01 billion. The situation worsened in the 2022-23 fiscal year, with repayments reaching $3.5 billion. Last fiscal year, the total repayment amounted to $3.36 billion.
This sharp rise in repayments, which has more than tripled in just ten years, has raised alarm, especially as the country is grappling with a foreign currency crisis. Economists warn that the pressure to manage and repay foreign debt is straining Bangladesh's reserves and national budget. They argue that the increasing debt burden, coupled with a shortage of foreign currency, is creating additional financial stress. The country's ability to balance foreign debt repayment with other economic needs has become an urgent concern for policymakers and experts alike.
