Bangladesh’s Foreign Debt Rises to $113 Billion

As of December 2025, Bangladesh’s total foreign debt reached $113.51 billion, equivalent to 13,96,173 crore Bangladeshi taka. This marks an increase from September 2025, when foreign debt stood at $112.21 billion. Compared with June 2025, when the total debt was $113.58 billion, the latest figures show a slight decrease from mid-year but a notable rise over the preceding quarter.

The Bangladesh Bank report highlights that both public and private sectors contributed to the increase in foreign borrowing during the October–December quarter, with a significant portion of the debt being long-term.

Composition of Foreign Debt

The report indicates that 82% of the total debt is held by the public sector, with the remaining 18% attributed to private sector industrial entrepreneurs. By December 2025, public sector debt amounted to $93.46 billion, while private sector debt reached $20.05 billion.

Within the public sector, $80.94 billion has been borrowed directly by the government, while $12.52 billion is held by Bangladesh Bank, government-owned banks, and other state institutions. In the private sector, after three consecutive quarters of decline from March to September 2025, foreign borrowing rose again in the final quarter, surpassing the $20 billion threshold. Of this, $10.18 billion represents short-term loans, including $6.06 billion in commercial credit, and $9.87 billion is long-term debt.

Debt Pressures and Remittances

Bangladesh Bank officials noted that during the caretaker government, loans were obtained from the International Monetary Fund, the World Bank, and other multilateral agencies to mitigate the dollar shortage. Earlier, loans were taken under the Awami League government to finance development projects that have not yet generated foreign exchange revenue. Consequently, both public and private sectors face mounting repayment pressures, which will rely on remittance inflows and export earnings.

During the first seven months of the 2025–26 fiscal year (July–January), foreign loans and grants totalled $26.416 billion, while repayments to various creditors amounted to $26.768 billion, underscoring the persistent repayment burden. In the previous fiscal year, over $4 billion in debt was repaid.

The dollar shortage intensified following the Russia–Ukraine war in early 2022, pushing the exchange rate from 85 BDT to 123 BDT per USD, fuelling inflation and straining household budgets. While the caretaker government stabilised reserves and the exchange rate, foreign debt continues to rise, reaching $113.51 billion by the end of 2025, up from $104.76 billion in 2024.