Bangladesh’s expenditure on servicing external debt has continued to rise, with total repayments increasing by nearly 10 per cent in the first nine months of the 2025–26 fiscal year compared with the same period of the previous fiscal year.
According to data from the Economic Relations Division (ERD), between July and March of 2025–26, the government repaid a total of US$3.525 billion on account of foreign loans, covering both principal and interest. In the corresponding period of 2024–25, repayments stood at US$3.212 billion.
The increase reflects higher obligations linked to accumulated external borrowing, with a growing share of loans now reaching repayment schedules.
Structure of repayments
ERD data show that principal repayments formed the larger portion of total debt servicing. In the first nine months of 2025–26, principal repayment amounted to US$2.2764 billion, compared with US$2.011 billion in the same period a year earlier.
Interest payments also registered a modest rise, reaching US$1.2486 billion, up from US$1.201 billion in the previous fiscal year.
External debt servicing comparison (July–March)
| Component |
2025–26 (US$) |
2024–25 (US$) |
Change |
| Total repayment |
3.525 billion |
3.212 billion |
+9.7% |
| Principal |
2.2764 billion |
2.011 billion |
+13.2% |
| Interest |
1.2486 billion |
1.201 billion |
+4.0% |
The figures indicate that principal repayments have risen more sharply than interest payments, contributing most significantly to the overall increase in debt servicing costs.
Decline in external inflows
In contrast to rising repayments, inflows from external financing sources declined during the same period. Total disbursement of foreign loans and grants fell to US$3.8918 billion in July–March 2025–26, compared with US$4.8088 billion in the corresponding period of the previous fiscal year.
Within this, loan disbursements decreased from US$4.4759 billion to US$3.5067 billion, reflecting a reduction in external funding support.
Commitments from development partners
New commitments from development partners also showed a downward trend. In the first nine months of the current fiscal year, total commitments amounted to US$2.8041 billion, compared with US$3.0053 billion in the same period of 2024–25.
Selected commitments by major lenders
| Institution |
Commitment (US$) |
| Asian Development Bank (ADB) |
1.27 billion |
| International Development Association (IDA) |
0.415 billion |
The Asian Development Bank remained the largest single source of new commitments, while the International Development Association (IDA), part of the World Bank Group, ranked second.
Overall external financing position
ERD data further indicate that among development partners, Russia accounted for the highest level of disbursements during the period under review, although detailed figures were not specified in the report.
Overall, the latest data from the ERD highlight a continued rise in external debt servicing obligations alongside a contraction in new inflows and commitments, underscoring shifting pressures in the country’s external financing position during the first nine months of the fiscal year.
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