External debt stood at $112.15 billion in FY25

Business Report :

Bangladesh’s outstanding foreign debt stood at $112.15 billion at the end of June 2025, up 7 percent from $104.80 billion in March.

In the last quarter of the 2024-25 fiscal year, borrowings by the private sector declined, according to data from Bangladesh Bank.

The government accounted for most of the increase. Its outstanding debt rose to $92.37 billion in June from $84.91 billion three months earlier, reflecting a 9 percent rise.

Debt in other corporations also increased, reaching $12.18 billion in June compared to $11.30 billion in March, an 8 percent rise.

In Q3, the government outstanding external debt to GDP ratio increased to 15.17 per cent in financial year 2023-2024 from 13.82 per cent recorded in FY 23,according to the BB statistics.
In contrast, private sector foreign debt edged down by around 1 percent to $19.77 billion in June from $19.88 billion in March.

The fall is attributed to weak demand, with private sector credit growth standing at 6.49 percent in June, a historically low level, as the central bank usually sets a double-digit target in its monetary policy.

The government typically secures loans from development partners such as the World Bank and the Asian Development Bank. These are usually long-term borrowings, with funds released gradually as projects advance.

Speaking on condition of anonymity, a Bangladesh Bank official said the rise in external debt is due to government’s increased borrowing to finance mainly physical development activities.
When asked about the growing external-debt obligations, the banker downplayed concerns, noting that the long-term nature of most loans mitigates pressure on the economy. The country does not need to worry about immediate repayment, the BB official said, adding that repayment pressure will gradually increase over a longer period.

Public sector corporations, however, depend on both short-term and long-term loans. Over the past year, their short-term borrowing has decreased, while long-term debt rose slightly, Bangladesh Bank data shows.

Meanwhile, Bangladesh’s annual foreign debt repayment crossed $4 billion for the first time in the history of the country in the fiscal year of FY25.

According to a report released by the Economic Relations Division (ERD), the country repaid around $4.087 billion in principal and interest amount to the development partners in FY25, marking the highest annual repayment on record. This represents a 21.2% increase from $3.372 billion paid in the previous fiscal year FY24.
Analyzing the ERD data, it was found that principal repayments rose 28.8pc year-on-year, amounting to $2.595 billion in FY25 compared to $2.02 billion in the FY24. Interest payments also rose by 10.5pc; reaching $1.491 billion in FY25, up from $1.349 billion in FY24.