Bangladesh’s external debt dropped slightly to $99.3 billion at the end of March 2024, down from $100.6 billion in December 2023, according to Bangladesh Bank data. This marginal decline reflects the government’s efforts to curb short-term borrowing amidst pressures to repay outstanding debts.
Since the beginning of 2022, foreign debts have hovered around $95 billion. Over the past 14 years, external debt has significantly increased from $23.5 billion in June 2009, highlighting the country’s growing reliance on foreign loans for development projects.
Between June 2020 and June 2023, foreign debt surged by 51%, rising from $65.27 billion to $98.93 billion, marking a $33.6 billion increase in just three years. External debts include amounts owed to foreign creditors, such as nations, international organizations, and private entities, covering both public and private obligations.
Bangladesh primarily receives foreign loans from multilateral institutions like the World Bank, the International Monetary Fund, the Asian Development Bank, the Islamic Development Bank, and major overseas commercial banks. By the end of March, the public sector had accumulated $79 billion in foreign credit, with the government directly borrowing $67.81 billion.
In the private sector, short-term foreign loans decreased to $20.29 billion in March 2024, down from $20.94 billion in December 2023 and $21.28 billion in September 2023. Similarly, buyers’ credit fell to $5.69 billion in March 2024 from $6.24 billion in December 2023.
The devaluation of the local currency, the taka, against the US dollar has exacerbated the cost of servicing foreign loans. The exchange rate surged from Tk84.80 per dollar in July 2021 to Tk118.
Experts emphasize the need for Bangladesh to manage and prioritize resources effectively to ensure sustainable economic growth and reduce reliance on foreign loans. They warn that inefficient loan allocation to non-productive sectors could lead to repayment difficulties.
