External loans go up by 6 percent

 
Bangladesh experienced its all out external debt escalate by around 6.0 percent to US$104.76 billion up to last March for reasons of the public sector's growing bent towards funds from external sources. According to the latest Bangladesh Bank data, the country's overall external debt buildup reached $104.76 billion by March 2024, which was around $6.0-billion higher from the corresponding period a year ago when the volume was $98.93 billion.

Since March 2024, the outstanding figure of foreign debts rose slightly to $103.41 billion and $104.41 billion in June and September last year respectively. It dropped a little to $103.74 billion by the end of December 2024, according to the central bank's data. The official data showed that long-term debt stands at $91.92 billion, while short-term borrowing amounts to $12.84 billion. The public sector incurred the maximum of the debt, $84.89 billion, with the remaining $19.87 billion owed by the country's private sector.

In terms of country-wise external debts, China is the leading creditor nation, with Bangladesh owing $3.35 billion followed by the Netherlands ($1.29 billion), The United Kingdom ($1.14 billion), and the United States of America ($0.79 billion). Speaking to journalists on condition of anonymity, a Bangladesh Bank official said the rise in external debt is due to government's increased borrowing to finance mainly physical development activities.

When asked about the growing external-debt obligations, the central banker downplayed worries, saying the long-term nature of most of the debts mitigates pressure on the economy. "The country does not need to consider immediate repayment," the BB official said, underscoring that repayment pressure will gradually increase over a longer period. The official mentioned that Bangladesh's external debt-to-GDP ratio remained well within the IMF-designated 40-percent threshold.

In terms of BB statistics, the government's outstanding external debt to GDP ratio increased to 15.17 percent in the financial year 2023-2024 from 13.82 percent recorded in the previous 2022-2023 fiscal year.

Economists have always suggested the interim government to follow a conservative policy over borrowing from foreign agencies. Rising external loans have all the likelihood to further aggravate the volatile circumstances prevailing over Bangladesh's economic scenario.