Saturday 27 / June / 2026
Bangladesh's total external debt stood at $78.22 billion as of March 2026, with debt servicing obligations expected to increase in the coming years, Finance Minister Amir Khosru Mahmud Chowdhury informed parliament.
Responding to a question from lawmaker Mostafizur Rahman Babul on June 24, the minister said that 61.97% of the country's external debt consists of concessional loans, while 38.03% is non-concessional borrowing, which generally carries higher interest rates and stricter repayment terms.
Khosru noted that Bangladesh's access to highly concessional financing has gradually declined since its transition from a low-income country to a lower-middle-income economy, a classification recognized by the World Bank in 2015. At the same time, foreign borrowing has increased significantly, leading to a growing future burden of principal and interest repayments.
To ensure sustainable debt management, the government has introduced stricter scrutiny of new foreign loan proposals and externally financed development projects. According to the minister, projects funded through foreign borrowing will be evaluated more rigorously, with priority given only to initiatives that promise strong economic returns.
The government has also stepped up monitoring of foreign-funded projects to address persistent issues such as implementation delays and cost overruns, which have historically increased project expenses and debt obligations.
In addition, Bangladesh is updating its Medium-Term Debt Management Strategy (MTDS) and conducting a Debt Sustainability Analysis (DSA) to strengthen public debt management and improve resilience against future financial risks.
The finance minister further announced that work will begin soon on a broader package of institutional and legal reforms aimed at enhancing the effectiveness, transparency, and sustainability of the country's debt management framework as repayment pressures continue to mount.
