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Bangladesh saw its overall external debt rise by around 6.0 per cent to US$104.76 billion up to last March mainly because of public sector’s growing appetite for foreign funds.

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 last year, the outstanding figure of foreign debts enhanced slightly to $103.41 billion and $104.41 billion in June and September last year respectively. It dropped a little to $103.74 billion be end of December, 2024, according to the data.

The official data showed that long-term debt stands at $91.92 billion, while short-term borrowing $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 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.

Asked about the growing external-debt obligations, the central banker downplayed concerns, 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, adding 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.

According to BB statistics, the government outstanding external debt to GDP ratio increased to 15.17 per cent in financial year 2023-2024 from 13.82 per cent recorded in previous FY’23.