Bangladesh’s expenditure on servicing foreign loans has continued to rise, with total payments increasing by nearly 10 per cent in the first nine months of the 2025–26 fiscal year compared with the same period of the previous year.
According to data from the Economic Relations Division (ERD), between July and March of the current fiscal year, the government repaid a total of US$3.525 billion (equivalent to 352.50 crore US dollars) in principal and interest on external borrowing. In the corresponding period of 2024–25, the repayment amount stood at US$3.212 billion (321.20 crore US dollars).
The rise in repayment obligations reflects both increasing external debt stock and the gradual maturity of earlier concessional loans.
Breakdown of repayments
During the first nine months of 2025–26, principal repayments amounted to US$2.2764 billion (227.64 crore US dollars), compared with US$2.011 billion (201.10 crore US dollars) a year earlier. Interest payments also recorded a modest rise, reaching US$1.2486 billion (124.86 crore US dollars), up from US$1.201 billion (120.10 crore US dollars) in the same period of the previous fiscal year.
Foreign debt servicing comparison (July–March)
| Category | 2025–26 (US$) | 2024–25 (US$) | Change |
|---|---|---|---|
| Total repayment | 3.525 billion | 3.212 billion | +9.7% |
| Principal repayment | 2.2764 billion | 2.011 billion | +13.2% |
| Interest payment | 1.2486 billion | 1.201 billion | +4.0% |
The data indicate that principal repayment obligations are rising at a faster pace than interest payments, reflecting the progression of earlier loan cycles into repayment phases.
Decline in disbursements and commitments
Alongside rising repayments, foreign loan and grant disbursements have declined. In the first nine months of the current fiscal year, development partners disbursed a total of US$3.8918 billion, down from US$4.8088 billion in the same period of the previous year.
Loan disbursements alone fell to US$3.5067 billion from US$4.4759 billion a year earlier, indicating a contraction in external funding inflows.
New commitments from development partners also decreased. During July–March 2025–26, total commitments stood at US$2.8041 billion, compared with US$3.0053 billion in the corresponding period of the previous fiscal year.
Selected commitments by development partners
| Institution | Commitment (US$) |
|---|---|
| Asian Development Bank (ADB) | 1.27 billion |
| International Development Association (IDA) | 0.415 billion |
The Asian Development Bank (ADB) remained the largest source of new commitments during the period, followed by the International Development Association (IDA), part of the World Bank Group.
Additional developments
ERD data further indicate that among development partners, the highest volume of disbursed funds during the first nine months of the current fiscal year came from Russia. However, detailed figures were not specified in the report.
Overall, the data reflect a combination of rising debt servicing costs and a slowdown in external financing inflows, highlighting increasing pressure on foreign currency outflows in the current fiscal period.