Bangladesh’s external debts slightly declined to $99.3 billion at the end of March 2024, down from $100.6 billion in December 2023, as per Bangladesh Bank data.
Experts said that foreign loans declined marginally due to the government’s efforts to curb short-term loans amid pressures to repay outstanding debts.
Therefore, the foreign debts have been hovering at $95 billion since the beginning of 2022.
Over the past 14 years, there has been a significant increase in foreign loans, rising from $23.5 billion in June 2009.
This surge underscores the country’s increasing reliance on foreign borrowing to finance development projects.
Between June 2020 and June 2023, foreign debts soared by 51%, escalating from $65.27 billion to $98.93 billion, marking a $33.6 billion rise in just three years.
External debts encompass the total amount owed by a country to foreign creditors, including nations, international organizations and private foreign entities, covering both public and private obligations.
Bangladesh usually receives foreign loans from multilateral institutions such as the World Bank, the International Monetary Fund, the Asian Development Bank, the Islamic Development Bank and major overseas commercial banks.
The Bangladesh Bank data showed that the public sector had accumulated $79 billion in foreign credit by the end of March, with the government directly borrowing $67.81 billion and various government institutions accounting for the rest.
In the private sector, short-term foreign loans dropped to $20.29 billion in March 2024, down from $20.94 billion in December and $21.28 billion in September 2023.
Similarly, buyers’ credit fell to $5.69 billion in March 2024 from $6.24 billion in December 2023.
The devaluation of the local currency taka against the US dollar has exacerbated the cost of servicing foreign loans.
The exchange rate, which was Tk84.80 a dollar in July 2021, surged to Tk118.
Experts stressed the necessity for Bangladesh to meticulously manage and prioritize resources to ensure sustainable economic growth and reduce over-reliance on foreign loans.
They cautioned that inefficient loan allocation in non-productive sectors could lead to repayment difficulties.
