Bangladesh’s total external debt climbed 8.6 percent to reach $113.4 billion in 2025, according to the World Bank’s International Debt Report 2026, even as the country maintained manageable debt-to-GNI and debt-service ratios amid a broader global financing squeeze.
The new report reveals that Bangladesh’s long-term public and publicly guaranteed (PPG) external debt stands at $89.5 billion. Multilateral creditors hold the majority share of these public obligations at $51.1 billion—primarily driven by the World Bank’s International Development Association ($22.6 billion) and the Asian Development Bank ($17.5 billion).
Bilateral debt accounts for $32.6 billion, anchored by major partners like Japan ($12.7 billion) and the Russian Federation ($9.0 billion).
Private nonguaranteed debt of $9.9 billion and $14.1 billion in short-term liabilities make up the remainder of the nation's external profile.
Despite the rising debt stock, Bangladesh’s macro-fiscal indicators reflect resilience compared to regional peers.
The country's external debt-to-GNI ratio stood at a moderate 24 percent, while the debt service-to-exports ratio eased by 3.1% to 16%.
Official commitments extended to Bangladesh also retained favorable terms, featuring an average maturity of 25 years, a 6-year grace period, and an average interest rate of 3%.
Zooming out to the regional picture, total external debt across South Asia reached $955 billion in 2025.
While regional debt-to-GNI ratios remain contained at an average of 21 percent, South Asian economies face an increasingly unforgiving global capital environment.
On a global scale, total external debt across all low- and middle-income countries (LMICs) surged 5.5% to a record $9.4 trillion in 2025, marking the sharpest increase in four years as private lenders and bond markets forcefully reopened.
However, this renewed market access has come at an exorbitant price, particularly for the poorest economies. Private creditors charged IDA-eligible countries an average interest rate of 8.2% on new commitments in 2025—the highest level seen since the late 1980s.
Total debt service payments for LMICs rose for the fifth consecutive year to $1.4 trillion, consuming over 40% of government revenues in vulnerable nations and crowding out vital spending on health, education, and infrastructure.
Commenting on the global outlook, World Bank Chief Statistician Haishan Fu warned that access to finance is not enough.
“We must know the debt, understand its terms, and ensure that the financing developing economies receive strengthens rather than constrains their ability to grow, withstand shocks, and improve the lives of their people."
Adding to this, World Bank analysts noted a troubling paradox where developing nations are borrowing more and paying steeper prices, ultimately leaving fewer resources available for long-term sustainable development.