The interim administration led by Dr. Muhammad Yunus has overseen a sharp rise in Bangladesh’s external indebtedness, which has now reached its highest level in history, according to the latest figures released by Bangladesh Bank. By the end of December 2025, the country’s total foreign debt stood at USD 113.51 billion, marking an unprecedented peak in the nation’s financial record.
Central bank data indicates that the upward trajectory has accelerated in recent months. Between September and December 2025 alone, external debt increased by approximately USD 1.30 billion, rising from USD 112.21 billion to USD 113.51 billion. This short-term growth signals a renewed intensification of borrowing activity, prompting fresh debate among economists and policy analysts.
A broader comparison highlights the speed of accumulation. At the time of the political transition in August 2024, Bangladesh’s external debt was recorded at USD 103.41 billion. Within roughly 16 months, the total burden has expanded by around USD 10 billion, underscoring the continued reliance on external financing to support development expenditure and fiscal shortfalls in Bangladesh.
Breakdown of External Debt
| Period | Total External Debt (USD billion) | Public Sector | Private Sector |
|---|---|---|---|
| August 2024 | 103.41 | Not separately reported | Not separately reported |
| September 2025 | 112.21 | 92.55 | 19.65 |
| December 2025 | 113.51 | 93.46 | 20.05 |
The data clearly show that the public sector remains the primary driver of external borrowing. Government-backed projects—particularly in infrastructure, energy, transport, and large-scale development schemes—continue to account for the majority of new loans. Although private sector borrowing has also increased slightly, its contribution remains comparatively modest.
Economists attribute the sustained rise in debt to several structural pressures. These include widening budget deficits, elevated development expenditure, and the financing requirements of major infrastructure initiatives. Over the past decade, Bangladesh has relied heavily on foreign funding for flagship projects such as metro rail systems, power plants, expressways, tunnels, and airport expansions.
Under the current interim administration, this trend has persisted. Reports suggest that nearly USD 4 billion in additional external borrowing has been contracted recently to help finance fiscal gaps, stabilise public expenditure, and manage macroeconomic pressures.
Despite the rapid accumulation, analysts stress that the more pressing concern is not the absolute level of debt, but the growing repayment obligation. In the coming years, significant principal and interest repayments are expected to fall due, which could place additional strain on foreign exchange reserves. If export earnings and remittance inflows fail to grow at a sufficient pace, maintaining macroeconomic stability may become increasingly challenging.
While external borrowing remains an essential tool for financing development, experts emphasise the importance of ensuring efficient allocation and productive utilisation of funds. Strengthening export diversification, boosting remittance inflows, and prioritising revenue-generating investments are seen as key policy priorities.
Overall, analysts conclude that although Bangladesh’s external debt remains manageable for now, weak debt management or slower economic growth could heighten financial vulnerabilities in the medium to long term.