Bangladesh's external debt climbs to $78.22 billion: Report
New Delhi, June 27
Bangladesh Finance Minister Amir Khosru Mahmud Chowdhury told parliament that the country's total external debt stood at $78.22 billion as of March this year, and warned that the country's debt‑servicing obligations are set to rise in coming years, a new report has said.
Around 61.97 per cent of the external debt is concessional while 38.03 per cent is non‑concessional, the report from Dhaka-based The Business Standard cited the minister as saying.
Further, the minister noted that access to highly concessional financing has dropped since Bangladesh moved from low‑income to lower‑middle‑income status, according to a World Bank assessment.
He told parliament that the growing volume of foreign borrowing will increase future principal and interest repayment burdens.
The finance minister also mentioned precautionary measures undertaken by the administration for sustainable debt management.
"Proposals for new foreign loans and related development projects are being scrutinised more rigorously to avoid financing unnecessary or low-priority projects through high-interest external borrowing," the media house cited the minister.
The government is only considering projects with high economic returns for foreign financing, he told parliament.
Khosru also informed that the government has strengthened monitoring of foreign-funded projects to curb the long-standing practice of project delays and cost overruns.
Further, the government is updating its Medium-Term Debt Management Strategy (MTDS) and conducting a Debt Sustainability Analysis (DSA) to strengthen the resilience and sustainability of public debt management.
Earlier this month, the media house argued that the estimated losses from corruption, overpricing, inefficiency, and systemic extraction could possibly exceed the country's budget deficit.
The National Board of Revenue has assigned a collection target of about Tk 6 lakh crore for the country but analysts warned that a substantial shortfall has been occurring repeatedly.
The government has proposed a budget of approximately Tk 9.3 lakh crore and projected a fiscal deficit of roughly Tk 2.43 lakh crore, equivalent to about 3.7 per cent of GDP.
— IANS
Reader Comments
Good to see Bangladesh is taking proactive steps with MTDS and DSA. But the corruption concern is alarming—if losses from corruption exceed the budget deficit, that's a structural problem. Transparency and accountability are non-negotiable.
As a neighbor, we in India watch this closely. Bangladesh's move to middle-income status is commendable, but it comes with reduced concessional loans. The key is to prioritize projects with high economic returns—something our own NITI Aayog emphasizes. Hope they avoid the debt trap.
Tk 9.3 lakh crore budget with a deficit of 3.7% GDP is manageable if revenue collection improves. But the revenue shortfall is worrying—target of Tk 6 lakh crore seems ambitious. Bangladesh needs to widen its tax base, like India is trying with GST reforms. 😊
Stronger scrutiny of foreign loans is a good step, but I hope it's not just on paper. India has seen too many projects delayed due to bureaucratic red tape. Bangladesh must ensure monitoring is effective and not just a formality. Otherwise, debt servicing will become a huge burden on future generations.
61.97% concessional debt is relatively safe, but the non-concessional portion growing is risky. Bangladesh should focus on boosting exports and FDI to reduce reliance on borrowing. India has used SEZs and production-linked incentives—maybe Bangladesh can adopt similar strategies? 🤔
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