Bangladesh’s Foreign Debt Repayments Rise to $667m

Representational image. Photo: Collected

Bangladesh repaid $667.11 million in foreign loans during the first two months of fiscal year 2025-26, marking a 13.2% increase compared to the same period last year, when repayments stood at $589.22 million, according to the Economic Relations Department (ERD).

Principal repayments accounted for $488.79 million, up 17.6% from $415.62 million in the corresponding period of FY25. Interest payments rose 2.7%, reaching $178.32 million from $173.60 million last year.

The country began FY26 under rising debt-servicing pressure. From March to June 2025, Bangladesh’s external debt increased by $7.35 billion, with the bulk flowing to the public sector, Bangladesh Bank data show.

Economists and senior officials said that fund releases from multiple donor agencies have driven the growth in public-sector external debt. They cautioned that foreign loans must be used efficiently, as much of the borrowing funds government projects. Without productive use, these loans could become a financial burden rather than a benefit.