Bangladesh’s external debt has climbed to around 78 billion dollars as of February 2026, Finance Minister Amir Khosru Mahmud Chowdhury informed parliament, highlighting a growing financial burden amid rising repayment obligations.
Responding to lawmakers in the Jatiya Sangsad, the minister said the government continues to service its foreign loans through budgetary allocations, with projections made annually to cover both principal and interest payments. However, the scale and pace of borrowing over recent years have raised concerns about sustainability.
Data presented in parliament show that Bangladesh borrowed nearly 86 billion dollars in foreign loans between FY2008-09 and FY2025-26, while repaying just over $31 billion in principal and interest combined. This has resulted in a sharp net increase in debt, driven largely by infrastructure spending and external shocks.
The country now faces a steep repayment trajectory. Bangladesh is expected to spend about 26 billion dollars on external debt servicing between 2026 and 2030, an amount equivalent to nearly two-thirds of what it repaid in the past five decades. Over a longer horizon, repayments could reach 51 billion dollars by 2035, with annual obligations peaking at around 5.5 billion dollars by the end of the decade.
While the current debt-to-GDP ratio – around 19% – remains within manageable limits, economists warn that underlying indicators are less reassuring. The debt servicing-to-revenue ratio has reached 16.5%, close to the International Monetary Fund’s risk threshold, reflecting pressure on government finances due to weak revenue mobilisation.
A key structural concern is Bangladesh’s low tax-to-GDP ratio, hovering near 7%, which limits fiscal capacity and increases reliance on borrowing. At the same time, delays and cost overruns in major projects have inflated repayment obligations without delivering timely economic returns.
With repayment cycles set to intensify in the coming years, the country faces a narrowing policy window to strengthen its fiscal base and avoid deeper financial vulnerabilities.
