Bangladesh’s external debt has almost tripled in a decade, reaching $113.44 billion at the end of 2025 as the country’s borrowing costs rose and repayments continued to absorb a significant share of export earnings.
The debt stock increased 8.6 per cent from $104.5 billion in 2024, compared with $38.77 billion in 2015, according to the World Bank’s “International Debt Report 2026.”
Public and publicly guaranteed loans accounted for the largest share of the debt. The category stood at $83.46 billion at the end of 2025, while private companies’ external borrowing without government guarantees reached $9.87 billion.
Short-term external debt added another $14.06 billion. Outstanding International Monetary Fund credit and special drawing rights allocations amounted to $6.05 billion, reported separately from long-term debt.
Official lenders remained the main source of public external financing. Multilateral creditors held $45.09 billion in public and publicly guaranteed debt, led by the World Bank at $22.64 billion. Bilateral creditors accounted for $32.64 billion, while private creditors held $5.72 billion.
External debt stood at 23.6 per cent of gross national income in 2025, up from 22.3 per cent a year earlier.
Debt service, including principal and interest payments, accounted for 15.7 per cent of export earnings, down from 16.2 per cent in 2024. However, the ratio remained well above the 5 per cent recorded in 2015.
The terms of new public borrowing also became less favourable.
The average interest rate on new public and publicly guaranteed commitments rose to 3 per cent in 2025 from 1.7 per cent in 2024.
Average maturity edged up to 25.4 years from 25.2 years, while the grace period shortened to 6.2 years from 6.9 years.
The composition of public debt also leaves Bangladesh exposed to movements in major currencies. US dollars accounted for 72.4 per cent of public and publicly guaranteed external debt in 2025, while Japanese yen made up 15.7 per cent and special drawing rights 5 per cent.
Bangladesh’s debt expansion comes amid a wider increase in developing-country borrowing. External debt across low- and middle-income countries rose 5.5 per cent to a record $9.4 trillion in 2025, the World Bank said.
Countries eligible for support from the World Bank’s International Development Association paid an average 8.2 per cent interest on new private-creditor commitments in 2025, the highest rate since 1989.
Developing countries paid a combined $1.4 trillion in principal and interest in 2025, a 1.9 per cent increase and the fifth consecutive annual rise. Between 2022 and 2025, they paid $436 billion more in debt service than they received in new financing.
