Bangladesh faces a growing foreign debt burden as repayments outpace new loan commitments. In the first five months of FY2024, the country repaid $1.711 billion in foreign loans, including $1.05 billion in principal and $655.1 million in interest, while receiving only $522.7 million in new loan commitments and $1.544 billion in disbursements. Foreign loan commitments fell by 91%, and disbursements dropped 27% year-on-year, driven by cautious project implementation and political instability, which hinder foreign-funded projects and delayed agreements with development partners.
The rise in repayments stems from maturing loans on past mega projects and higher interest rates. Experts warn of increasing debt repayment pressures, emphasizing the need to boost revenue, exports, and remittances to sustain economic stability. Development partners, including Japan and the World Bank, reduced commitments, while disbursements from ADB, Russia, and others supported ongoing projects. Without reforms, Bangladesh risks economic stagnation under mounting foreign debt obligations.