Foreign Debt Rises to $103 Billion, Risks Increasing

Staff Reporter

At the end of December 2024, the country’s foreign debt stood at $103 billion. In the 2016-17 fiscal year, this amount was only $51 billion. This means foreign debt has more than doubled in the past seven years, raising concerns about additional pressure on the economy.

Public Sector Borrows $84 Billion
According to data from the Bangladesh Bureau of Statistics and the central bank, the public sector accounts for $84 billion of the current foreign debt, representing about 81.5% of the total. The remaining $19 billion has been borrowed by the private sector. During this period, public sector debt grew at a rate of 6.3%, while private sector debt increased by 5.3%.

Growing Pressure of Interest Payments
Analysts warn that if the current borrowing trend continues, the economy could face significant stress in the coming years. Projections indicate that interest payments on foreign debt may increase by up to 65% by 2027.

Higher Borrowing Costs After LDC Graduation
Experts further caution that Bangladesh is on the path to graduating from Least Developed Country (LDC) status. After graduation, access to low-interest loans from international development partners will shrink, making foreign borrowing more expensive in the future.

Economists Urge Prudent Debt Management
Economists acknowledge that while foreign loans are a crucial source for infrastructure development and large projects, excessive reliance on them could be risky. If borrowed funds are not properly allocated and returns are not ensured, this debt could become a future burden.

They emphasize the need for clear debt management strategies, avoiding high-interest loans, and increasing domestic revenue to reduce foreign dependence. With the impending LDC graduation, access to concessional loans will diminish, making responsible borrowing and timely repayment critically important.