Bangladesh’s debt landscape is dominated by loans from the World Bank, with the International Development Association (IDA) providing the largest chunk of $18.129 billion, constituting 33% of the country’s total foreign debt. The IDA offers concessional loans with low-interest rates and favorable repayment terms such as a service charge of 0.75% and an interest rate of 1.25%, totaling 2%. Additionally, a commitment fee of 0.50% per annum applies to unfunded financing status along with installment payments waiver for the first five years, and repayment extending over 30 years.
Despite the benefits, Bangladesh’s external debt has been steadily rising, increasing by over $4 billion in a year. Apart from the World Bank, loans from Russia, China, India, South Korea, and the Islamic Development Bank contribute to the total debt burden, surpassing $100 billion by the end of 2023. This escalation highlights the importance of cautious borrowing aligned with the country’s capacity for the government.
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