Debt repayments narrow financing gap
Foreign debt repayments in Bangladesh are approaching the level of new external inflows, reflecting growing pressure on the country’s external financing position.
During the first eight months of the current fiscal year (July–February), repayments of foreign loans in principal and interest nearly matched the volume of new loans and grants received.
According to an updated report released by the Economic Relations Division (ERD) on Monday, Bangladesh received $3.053 billion in foreign loans and grants during the July–February period, while total repayments to external lenders stood at around $2.9 billion over the same period.
The figures highlight the increasing burden of external debt servicing in recent years.
In the previous fiscal year alone, Bangladesh repaid more than $4 billion in foreign debt, indicating a steady rise in repayment obligations.
Speaking at a programme organised by the National Board of Revenue (NBR) on Sunday, Finance and Planning Adviser to the Prime Minister Rashed Al Mahmud Titumir said the government is committed to maintaining prudent debt management and avoiding an excessive buildup of domestic and foreign liabilities.
The ERD report shows that Bangladesh repaid $1.95 billion in principal and $950 million in interest during the first eight months of the fiscal year.
During the same period, new foreign loans amounted to $2.79 billion, while grants totalled $260 million.
Officials said Bangladesh secured foreign loan commitments worth $2.43 billion during the July–February period, slightly higher than the $2.35 billion pledged in the corresponding period of the previous fiscal year, suggesting continued engagement with development partners.
Among bilateral and multilateral lenders, Russia provided the highest amount at $755.1 million during the period.
The World Bank followed with $636 million, maintaining its position as a key development partner in major projects.
The Asian Development Bank (ADB) contributed $566.1 million to support infrastructure, energy and development programmes, while India extended $257.7 million in financing, mainly for power and connectivity projects.
China provided $250 million, largely directed towards infrastructure and energy initiatives, and Japan contributed around $190 million, focusing on technology, energy and social development programmes.
Economists note that while external financing remains essential for development, the narrowing gap between inflows and repayments underscores the importance of careful debt management, export growth and improved revenue mobilisation to maintain macroeconomic stability.
