Foreign debt triples to $113.43b in a decade

Bangladesh’s outstanding foreign debt has nearly tripled over the past decade, reaching US$113.43 billion at the end of 2025, up from $38.77 billion in 2015, as the country faces mounting pressure to repay external loans.

The outstanding debt is equivalent to around Tk14.18 lakh crore at an exchange rate of Tk125 per dollar, according to the World Bank’s International Debt Report 2026.

The country’s external debt stock increased by 8.6% in 2025 from the previous year, reflecting continued growth in borrowing amid rising debt repayment pressures across developing economies.

The report, released on Thursday (Washington time), shows that multilateral development institutions remain the largest source of Bangladesh’s public external financing.

Bangladesh owed $51.14 billion to multilateral lenders at the end of 2025, including $22.63 billion to the World Bank and $17.51 billion to the Asian Development Bank (ADB).

The country’s debt to bilateral lenders, including Japan, China, India and Russia, stood at $32.64 billion. Japan accounted for the largest share at $12.72 billion, followed by Russia at $9.02 billion.

In addition, private-sector foreign debt stood at around $10 billion, while short-term external debt amounted to approximately $15 billion.

Despite the sharp rise in outstanding debt, Bangladesh’s external debt indicators remain relatively manageable, according to the report.

The country’s external debt-to-gross national income (GNI) ratio stood at 24%, up around six percentage points from a year earlier.

However, the debt service-to-exports ratio declined by 3.8 percentage points to 16%. This means Bangladesh spent an amount equivalent to 16% of its export earnings on repaying foreign loan principal and interest.

Meanwhile, annual foreign debt repayments have increased more than fourfold over the past 14 years, according to the Economic Relations Division (ERD).

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Bangladesh repaid $1.1 billion in foreign loans in FY13. The amount rose to $2.01 billion in FY22 and nearly $3 billion in FY23.

In FY26, the country paid around $4.5 billion in foreign debt servicing, indicating growing pressure on its external resources.

The repayment burden is expected to increase further as instalments for several major infrastructure projects fall due.

These include the Rooppur Nuclear Power Plant and the third terminal of Hazrat Shahjalal International Airport, with Bangladesh required to make repayments to Japan. Repayments for the Karnaphuli Tunnel and metro rail projects have already begun.

With outstanding foreign debt continuing to rise and repayments increasing, managing external liabilities is becoming an increasingly important challenge for Bangladesh’s economy.