Published: 12:41 AM, 01 May 2026
Pressure mounts to repay foreign debt: Report
Bangladesh is experiencing mounting pressure in repaying its foreign debt, as outflows for loan servicing continue to rise alongside fresh disbursements, according to the latest report from the Economic Relations Division (ERD).
In the first nine months of the current fiscal year (July-March), the country paid more than $3.5 billion in principal and interest on external loans to development partners, including the World Bank, Asian Development Bank, and Japan, UNB reports.
The ERD report shows that Bangladesh repaid $3.525 billion during the period, while receiving $3.89 billion in foreign loans and grants. Of the repayments, $2.276 billion was principal and $1.25 billion interest.
Foreign loans are primarily used to finance projects under the Annual Development Program (ADP), with the ERD maintaining records of disbursement and repayment.
At the same time, reliance on domestic borrowing has also increased. To bridge the budget deficit, the government borrowed over Tk 1 lakh crore from the banking system during the first nine months of the fiscal year. After partial repayments, the net borrowing now stands at around Tk 93,000 crore, adding further strain to overall debt servicing obligations.
Officials noted that Bangladesh has been facing a steady rise in foreign debt repayments over the past few years. In the previous fiscal year, the country crossed the $4 billion mark in external debt servicing for the first time, repaying $4.09 billion, up from $3.37 billion the year before.
If the current trend continues, total foreign loan repayments could exceed $5 billion by the end of the current fiscal year, according to related officials.
The report further reveals that Bangladesh received $3.5 billion in loans and $380 million in grants during the July-March period. However, total loan commitments declined slightly to $2.8 billion, compared to $3 billion in the same period of the previous fiscal year.
Among development partners, Russia disbursed the highest amount during the nine-month period, providing approximately $830 million. The World Bank followed with $765 million, while the Asian Development Bank disbursed about $610 million.
China and India released $520 million and $240 million respectively, while Japan provided around $310 million.
In addition, the government is securing about $4.7 billion in budget support loans from development partners. Foreign development partners also provide debt support to the private sector.
