The government spent significantly on foreign debt repayment in the first month of the new fiscal year.
According to the latest report from the Economic Relations Division (ERD), in July, loan disbursement stood at $202.44 million, while repayment of principal and interest reached $446.68 million — more than double the disbursement.
The report noted that $327.72 million was paid in principal and $118.96 million in interest to development partners during the month.
ERD officials said Bangladesh has taken large volumes of foreign loans in recent years, many with stringent conditions. Some carry relatively high interest rates and short repayment periods, and with several grace periods expiring, repayment pressure has intensified.
Authorities estimate that foreign debt repayment could reach around $5 billion by the end of the current fiscal year. In the previous fiscal year, Bangladesh repaid a total of $4.086 billion in principal and interest.
Economists warn that rising dependence on foreign loans increases repayment pressure, reducing the scope for using new loans in development projects and adding strain to foreign currency reserves.
