Staff Reporter :
Bangladesh’s foreign debt repayments have increased by 23.4 per cent in the first 11 months (July-May) of the current fiscal year, reaching nearly $4 billion in interest and principal payments.
According to a report released by the Economic Relations Department (ERD) on Sunday, the government paid $3.784 billion to development partners during this period – the highest on record.
In comparison, the country paid $3.068 billion over the same period last fiscal year. Total repayments in FY2023-24 (July-June) stood at $3.37 billion.
Earlier in first ten months of FY25, Bangladesh repaid $3.5 billion in foreign loans during the first 10 months of the current fiscal year 2024-25, exceeding the $3.37 billion repaid in the entire previous fiscal.
Officials said the rise is due to the repayment burden at the end of grace periods for large infrastructure and budget-support loans, along with higher market-based interest rates.
Correspondingly, economists argued Bangladesh took on several large and expensive loans during the previous government’s tenure. Many of these loans had short grace periods and high interest rates, leading to a growing repayment burden.
Several more grace periods, including loans for the Rooppur Nuclear Power Plant, are set to expire within the next one to two years, to further put pressure on the budget, they said.
Despite the increase, foreign loan commitments and disbursements have declined in FY25.
However, ERD officials expect disbursements and commitments to rise in the final months of FY25, mainly due to upcoming budget-support loans.
The government is currently in talks with the World Bank, ADB, Japan, and AIIB for $2.2 billion in support, which may be finalized by June, they said.
