External debt up again in Dec quarter

Bangladesh’s total foreign debt increased by $1.30 billion in the October–December quarter of 2025, reaching $113.51 billion, according to a report released by Bangladesh Bank on Wednesday.

The central bank’s latest data indicates a moderate rise in external borrowing during the quarter. Foreign debt had stood at just over $112 billion at the end of the July–September period, while it was recorded at $113.58 billion in the June quarter.

Officials at Bangladesh Bank said the increase was largely driven by higher borrowing by both the public and private sectors. Public sector external debt rose to $93.46 billion, while private sector borrowing reached $20.05 billion, both showing a gradual uptick from the previous quarter.

Dr. Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said foreign borrowing remains an important source of development financing, but its sustainability depends on effective utilisation.

He noted that external loans are justified when they support productive projects that enhance livelihoods and generate economic returns, warning that inefficient use could create long-term repayment pressures.

A senior central bank official echoed this view, saying prudent management and proper monitoring of foreign-funded projects are essential to maintain repayment capacity and avoid additional strain on the economy.

Another Bangladesh Bank official explained that part of the quarterly increase reflected technical factors, including dollar inflows into ACU-related accounts and offshore banking units.

As ACU payments were not settled during the December quarter, the outstanding amounts were reflected in the latest debt figures. In addition, around $400 million in foreign funds entered offshore banking units, contributing to the overall rise.

Overall, officials described the increase as manageable, stressing that careful oversight and productive use of external borrowing would remain crucial to maintaining macroeconomic stability.