Bangladesh's foreign debt nearly triples in a decade

Most of the country's development projects are being implemented with borrowed money. And the reliable source of that borrowing is foreign loans. But the burden of that debt is growing fast. In the past decade, the country's outstanding foreign debt has nearly tripled. At the same time, the cost of repaying principal and interest is also rising.

The World Bank's 'International Debt Report 2026' presents a worrying picture of how heavily the foreign debt burden is weighing on Bangladesh. According to the data, at the end of 2025, Bangladesh's foreign debt stock stood at 113.43 billion dollars. In 2015 it was 38.77 billion dollars.

At the current market rate (125 taka per dollar), this debt amounts to about 14 lakh 18 thousand crore taka. Compared to 2024, the debt stock rose by 8.6 percent in 2025. In other words, the liability of development projects is steadily increasing.

The World Bank published the report in Washington on Thursday last (5 November). According to the report, as instalments on loans for major projects have already begun to be repaid, this pressure is likely to grow further in the coming years.

It is not only Bangladesh — the debt situation of other developing countries has also become worrying. Data from the World Bank's International Debt Report 2026 say that in 2025, total foreign debt taken by developing countries rose by 5.5 percent to a record 9.4 trillion dollars. This is the highest annual increase since 2021.

During this period, poor countries are having to borrow at the highest interest rates in decades. This has created a risk that investment in education, health and improving living standards will shrink. Government bond issuance rose 35 percent to 251 billion dollars.

The major source of Bangladesh's government foreign debt is multilateral development agencies. Debt to these agencies is 51.14 billion dollars. Of this, 22.63 billion dollars is owed to the World Bank and 17.51 billion dollars to the ADB.

Debt to bilateral lender countries is 32.64 billion dollars. Of this, 12.72 billion dollars is owed to Japan and 9.02 billion dollars to Russia. In addition, the outstanding foreign debt taken by the country's private institutions is about 10 billion dollars. On the other hand, the amount of short-term foreign debt that must be repaid within a year is about 15 billion dollars.

However, the report said that although debt has increased, Bangladesh is still relatively comfortable on several indicators of repayment capacity. The ratio of foreign debt to gross national income (GNI) is 24 percent, which has risen by about 6 percent in a year.

But the ratio of principal and interest payments to export earnings has fallen to 16 percent, down 3.8 percent from the previous year. In other words, 16 percent of total export earnings are being spent on repaying the principal and interest of foreign debt. The decline in this ratio is seen as a positive aspect of repayment capacity.

The amount of debt repayment is rising fast. According to the Economic Relations Division (ERD), in July–September of the current 2026–27 fiscal year, Bangladesh paid 1,351.23 million dollars in principal and interest. In the same period of the previous fiscal year, the amount paid was 1,279.95 million dollars.

The long-term trend also points to pressure. In the 2012–13 fiscal year, Bangladesh repaid 1.10 billion dollars of foreign debt. In 2021–22 it rose to 2.01 billion dollars. In 2022–23, the amount of debt repayment reached nearly 3.00 billion dollars.

In the most recent outgoing 2025–26 fiscal year, Bangladesh had to spend about 4.50 billion dollars on foreign debt repayment. In other words, annual repayment has risen more than fourfold over 14 years.

Debt repayment pressure may rise ahead: in the coming years, Bangladesh's foreign debt repayment pressure is likely to increase further. This is because repayment of principal and interest on loans for several large infrastructure and power projects is starting or has already started.

Instalments on loans for the Rooppur Nuclear Power Plant and the third terminal construction project of Hazrat Shahjalal International Airport are due to begin soon. The money for these loans must be repaid to Japan. On the other hand, instalment payments on loans for the tunnel under the Karnaphuli River and the metro rail projects have already begun.