Bangladesh is set to tackle a significant financial hurdle, needing $26 billion to repay external debt from 2026 to 2030. This burden is deemed substantial, considering the country has spent $40 billion on debt repayment since independence. Currently, Bangladesh’s total external debt stands at $77 billion, representing 19% of its national income.
The country’s debt servicing to government revenue ratio is at 16.5%, slightly below the International Monetary Fund’s risk threshold of 18%. However, concerns persist as this ratio has been increasing over time. By 2030, annual repayments are expected to peak at approximately $5.5 billion, with total repayments from 2026 to 2035 reaching $51 billion.
Bangladesh faces challenges from both global and domestic factors contributing to its escalating debt. Global issues like the Ukraine conflict, the Covid-19 pandemic, and the Middle East crisis have impacted the country’s exports, foreign investment, and remittances. Domestically, large infrastructure projects funded through foreign loans, such as the Ruppur Nuclear Power Project and the Padma Rail Link, have added to the debt burden. Delays in project implementation have inflated costs, elevating debt repayment obligations.
