Business ReportĀ :
Bangladesh’s foreign loan outflow has almost matched its inflow during the first four months of the current fiscal year (July-October 2025-26), reflecting growing repayment pressures amid tightening global financing conditions, according to newly released data from the Economic Relations Department (ERD).
ERD figures published on Sunday show that development partners disbursed $1.66 billion during the period, while Bangladesh repaid $1.585 billion in principal and interest leaving a narrow net gain in external financing.
During the same four months, the government signed new loan agreements worth $1.2 billion and secured substantial new aid commitments.
Foreign aid pledges surged by 375 percent compared to last year, supported mainly by renewed project financing and budget-support negotiations with major multilateral lenders.
Foreign debt relief also climbed 38.51 percent, while repayments on principal and interest rose by 10.23 percent.
Officials said this year’s stronger disbursements and commitments reflect a resumption of development activities that were slowed by the political unrest and administrative standstill during the July-September 2024 Mass Uprising.
Many projects had been delayed or suspended during that period, causing unusually low disbursements last year.
However, they also noted that Bangladesh’s external repayment burden continues to rise sharply as grace periods expire on major loans taken over the past decade for infrastructure, energy, and budget-support programmes.
Several large loans from China, Japan, the World Bank, and the Asian Development Bank have now entered their repayment phases, adding to fiscal pressure.
Economists warn that the narrowing gap between disbursements and repayments signals increasing stress on the country’s external financing position, particularly at a time when foreign exchange reserves remain under pressure and new borrowing terms are becoming more stringent.
Officials said the government is working to accelerate project execution to boost disbursement rates and maximise the use of committed funds, which currently remain significantly underutilised.
They also emphasised the need for tighter debt management and more efficient prioritisation of external borrowing in the coming years.
