Bangladesh’s outstanding external debt nearly tripled to $113.43 billion in 2025 from $38.77 billion a decade earlier, raising concerns over mounting repayment obligations as instalments on several mega projects come due.
The debt stock, equivalent to around Tk14.18 lakh crore at an exchange rate of Tk125 per dollar, increased 8.6 percent from 2024, according to the World Bank’s International Debt Report 2026, released in Washington on Thursday.
The rising debt burden comes as Bangladesh’s annual repayment obligations have climbed sharply, reaching nearly $4.5 billion in the last fiscal year, according to the Economic Relations Division (ERD).
Multilateral development lenders remain the largest source of Bangladesh’s external financing. The country owed $51.14 billion to multilateral institutions at the end of 2025, including $22.63 billion to the World Bank and $17.51 billion to the Asian Development Bank.
Bilateral creditors accounted for another $32.64 billion. Japan was the largest bilateral lender, with outstanding loans of $12.72 billion, followed by Russia with $9.02 billion.
In addition, external borrowing by the private sector stood at around $10 billion, while short-term external debt amounted to nearly $15 billion, the report showed.
Despite the sharp increase in debt, some indicators suggest that Bangladesh’s repayment capacity remains manageable for now.
External debt stood at 24 percent of gross national income (GNI) in 2025, up nearly six percentage points from the previous year.
However, the debt-service-to-exports ratio declined by 3.8 percentage points to 16 percent, meaning Bangladesh spent 16 cents of every dollar earned from exports on servicing external debt, including principal and interest payments.
The decline in the ratio indicates some improvement in the country’s capacity to meet external debt obligations from export earnings.
Meanwhile, Bangladesh’s annual external debt repayments have increased more than fourfold over the past 14 years.
The country paid $1.1 billion in external debt service in fiscal 2012-13, which rose to $2.01 billion in 2021-22 and nearly $3 billion in 2022-23.
The amount climbed further to around $4.5 billion in fiscal 2025-26, according to ERD data.
The repayment burden is expected to increase further as loan instalments for major infrastructure projects enter the repayment phase.
These include the Rooppur Nuclear Power Plant, the third terminal of Hazrat Shahjalal International Airport and the Karnaphuli Tunnel. Repayments have also started for the Dhaka metro rail project.
A significant portion of the project loans is owed to foreign creditors, including Japan and Russia, putting additional pressure on the country’s foreign exchange resources in the coming years.