Bangladesh’s external debt has crossed $113.5 billion, but the sharper risk lies in how it is structured. The burden has shifted decisively onto the state, while reserve cover remains thin at just $29.53 billion under BPM6.
The mismatch is widening, leaving the economy increasingly exposed to external shocks despite a largely long-term debt structure.
The latest central bank data show the external debt stock stood at $113.52 billion at end-December 2025, up from $112.22 billion in September, continuing a steady upward trend.
A breakdown of the data shows the burden is now overwhelmingly public. The public sector accounted for $93.46 billion, or more than 82 per cent of total external debt, while the private sector owed $20.06 billion.
At the centre of this exposure is the government. External liabilities of the general government reached $80.94 billion, accounting for over 71 per cent of the country’s total external debt, all long-term.
The trend marks a clear shift in the structure of external borrowing. Public external debt rose from 15 per cent of GDP in 2021-22 to 20.2 per cent in 2024-25, showing how the state has taken on a growing share of external financing.
As of 16 March 2026, Bangladesh’s gross foreign exchange reserves stood at $34.22 billion, while reserves under the BPM6 method were $29.53 billion. Even at these levels, reserves remain modest relative to the external debt stock.
Central bank indicators show reserves covered only 23.6 per cent of total external debt in 2024-25, down sharply from 40.1 per cent three years earlier, underscoring the erosion of external buffers.
The maturity structure offers some stability. About 87.6 per cent of external debt is long-term, while 12.4 per cent is short-term. But deeper analysis shows that risks are shifting rather than disappearing.
The creditor mix remains dominated by official lenders. Multilateral institutions accounted for $46.98 billion and bilateral creditors for $32.72 billion, together making up more than 70 per cent of total external debt. While this reduces exposure to volatile market borrowing, it ties the debt trajectory closely to fiscal policy and external financing needs.
On the private side, external borrowing has eased from earlier peaks. Private external debt stood at $20.06 billion in December 2025, down from $25.95 billion in mid-2022. However, the composition of that debt reveals persistent vulnerabilities.
Private-sector liabilities remain tilted toward short-term financing. Of the total, $10.19 billion is short-term, slightly exceeding $9.87 billion in long-term borrowing. Within short-term debt, trade credit accounts for $6.06 billion, while short-term loans stand at $3.11 billion, including $2.35 billion through offshore banking units (OBUs).
The latest quarterly data show that the recent increase in private external debt was driven entirely by a rise in short-term liabilities, while long-term borrowing declined.
At the same time, corporate borrowers are repaying more than they are borrowing. In 2025, private-sector debt service reached $1.77 billion, exceeding new external borrowing of $1.63 billion. In the final quarter alone, repayments were more than double fresh borrowing, pointing to tightening external financing conditions.
Country-wise, private medium- and long-term debt remains concentrated among a few creditors. China accounted for $3.38 billion, followed by the Netherlands at $1.39 billion and the United Kingdom at $1.05 billion.
Taken together, the data point to a shift in Bangladesh’s external debt dynamics, with the state assuming a larger share of liabilities while reserve coverage remains limited.
