Written by The Banking Post
Bangladesh’s foreign debt servicing costs have exceeded $4 billion for the first time, underscoring mounting repayment pressures amid declining external financial support.
According to provisional data released by the Economic Relations Division (ERD) on Sunday, the government paid just over $4 billion in debt servicing during the 2024–25 fiscal year—a 21% increase from $3.37 billion in the previous year.
In local currency terms, the burden surged even more sharply, rising 32% year-on-year to Tk 49,390 crore, further straining the government’s fiscal space.
This rising debt repayment obligation coincides with a notable decline in foreign aid and loan inflows. Bangladesh received $8.56 billion in foreign loans in FY25, a 17% drop from the previous year and the lowest figure in the past four years.
Meanwhile, fresh loan commitments by multilateral and bilateral development partners declined 22% year-on-year, totaling $8.32 billion—down from $10.7 billion in FY24.
Analysts warn that the dual challenge of increasing debt repayment and falling external financing could complicate macroeconomic management, particularly at a time when the government is seeking to stabilize foreign exchange reserves and manage inflationary pressures.
