Bangladesh’s external debt triples in a decade to $113 billion

According to the World Bank’s International Debt Report 2026, Bangladesh’s external debt has grown almost three times in the last ten years and now stands at $113 billion. This is the third highest in South Asia. Concern is rising every day over the growing pressure of repaying these loans. In 2015, Bangladesh’s external debt was about $38 billion. In this region, only the Maldives has a higher rate of debt growth than Bangladesh.

For every $100 that Bangladesh earns from exports in a year, its external debt is $210, and it spends $16 on debt payments. Compared with export earnings, Bangladesh’s debt burden is lighter than that of Pakistan, Bhutan and Sri Lanka, but heavier than that of India and Nepal. India has the highest external debt in South Asia at $764 billion. Pakistan follows with $135 billion, Sri Lanka with $57 billion, Nepal with $11 billion, the Maldives with $4.7 billion and Bhutan with $3.3 billion.

In 2025, Bangladesh spent 16 percent of its export earnings on debt payments. This is 3.1 percentage points lower than the year before. The ratio of debt to gross national income was 24 percent, while the regional average was 21 percent. However, the ratio of external debt to annual export earnings is 210 percent in Bangladesh, compared with 83 percent in India and 95 percent on average in the region.

Mr. Zahid Hossain, a former chief economist of the World Bank, said the ability to repay loans depends on export strength and the supply of foreign currency. He said Bangladesh faces a big challenge because its export goods lack variety and the country depends too heavily on the garment sector. He also warned that Bangladesh could fall into a crisis like Sri Lanka’s if it keeps borrowing at the current pace. In his words, if the country is not careful about what kind of loans it takes and how it uses the borrowed money, becoming another Sri Lanka is only a matter of time.

Mr. Mostafizur Rahman of the Centre for Policy Dialogue (CPD) said about 85 percent of Bangladesh’s export earnings come from the garment sector. Because local value addition in this sector is 60 to 65 percent, it becomes harder to calculate net export earnings. He added that high interest rates and shorter repayment and grace periods are increasing the pressure. In the last fiscal year, the government’s debt payments reached $4.9 billion, and they could rise to $7.6 billion by 2029.

Worldwide, the external debt of developing countries rose by 5.5 percent in 2025 and reached a record $9.4 trillion. Low and middle income countries paid $1.4 trillion in principal and interest. Between 2022 and 2025, developing countries spent $436 billion more on debt payments than the new financing they received.

Mr. Mostafizur Rahman said the global financing situation is becoming harder. He said Bangladesh will still need external loans. He urged the government to negotiate for better terms, make sure it gets financing on easier terms, and consider issuing bonds.