Interim Government’s Debt Dependence Grows: Record Burden of $112 Billion

Staff Correspondent

Bangladesh’s foreign debt has hit a new record. At the end of June this year, the debt stood at 112.16 billion US dollars, or about 13,68,352 crore taka (based on 122 taka per dollar). This debt has increased by about 9 billion dollars in just six months. Economists say this is a serious warning signal for the country.

According to Bangladesh Bank data, the amount of foreign debt was $104.8 billion in March. The debt increased by another $7.36 billion in just three months.

Experts believe that debt dependence is increasing instead of decreasing even during the interim government.

According to analysts, the government’s inefficiency in development spending, failure in reserve management, and excessive pressure on foreign exchange have further complicated the situation. As a result, the pressure of debt repayment and interest payments is becoming more severe compared to foreign income.

Dr. Zahid Hossain, former chief economist of the World Bank, warned that while the debt-to-GDP ratio is still bearable, the pressure on repayments is dangerous. In his words, “If the debt is not used properly, its burden will become even heavier in the coming days.”

Data shows that 82 percent of foreign debt is in the public sector, while the remaining 18 percent is in the private sector. At the end of June, public sector debt stood at $92.37 billion—an increase of nearly 9 percent in just three months. In contrast, private sector debt remained unchanged.

According to the United Nations Population Fund, per capita foreign debt now stands at $638, which is about 77,433 taka in local currency. Ten years ago, this debt was only $257.

Economists say that if the debt growth trend cannot be stopped during the interim government, the country is bound to fall into a debt trap.