Published : 03 Aug 2026, 06:33 AM
Updated : 08 Sep 2026, 09:29 AM
Bangladesh has broken its record for foreign debt repayments, even as fresh loan commitments from development partners sank to their lowest level in more than a decade.
In the fiscal year ended Jun 30, the government paid $4.49 billion in principal and interest on foreign loans, up 10 percent from $4.09 billion the previous year.
But new loan commitments fell 37 percent to $5.24 billion, the lowest in 12 years. Bangladesh had secured $8.32 billion in commitments in FY2024-25.
The figures, released by the Economic Relations Division (ERD) on Sunday, show Bangladesh received $8.07 billion in foreign loans during FY2025-26, 5.78 percent less than the previous year.
Of the repayment, $2.96 billion was principal and about $1.54 billion interest. In taka, the government paid nearly Tk 550 billion, compared with Tk 493.9 billion a year earlier.
Repayments Quadruple in 14 Years
Economists have long warned about the burden of foreign borrowing for major infrastructure projects. Bangladesh repaid just $1.1 billion in FY2012-13. That rose to $2.01 billion in FY2021-22, $2.75 billion in FY2022-23 and $3.37 billion in FY2023-24.
The latest figure is more than four times the level 14 years ago.
World Bank Leads Lending
The World Bank provided the largest share of disbursed loans at $2.07 billion, followed by the Asian Development Bank at $1.91 billion and Russia at $1.04 billion. Japan’s JICA provided $795.3 million, while China and India provided $532.9 million and $278.6 million respectively.
The ADB led new commitments at $2.69 billion, followed by the World Bank at $820 million. Japan, AIIB and China committed $314 million, $250 million and $280 million respectively.
India and Russia made no new commitments.
Bigger Borrowing Planned
Despite the mounting repayments, the FY2026-27 budget targets Tk 1.56 trillion in foreign borrowing -- 2.28 percent of GDP -- to finance the deficit.
After repayments, net foreign borrowing is projected at Tk 1.1 trillion, 89.4 percent higher than the previous year’s revised figure.
