Bangladesh is confronting a significant financial challenge as it faces nearly $30 billion in debt repayments this fiscal year, encompassing both domestic and external obligations. According to the latest forecast by the International Monetary Fund (IMF), this repayment burden is exerting substantial pressure on the country’s economy and government budget.
The IMF has warned that without a significant increase in domestic revenue collection, the country may face heightened risks associated with debt refinancing. A particular concern is the “rollover risk”, which arises when maturing debt cannot be replaced with new borrowings under favourable conditions. This scenario could constrain new borrowing options and, amid rising global interest rates, place additional strain on economic stability.
The IMF’s Article IV consultation report indicates that the government’s debt repayment obligations for the current fiscal year amount to $30.59 billion, up from $26.63 billion in the previous year. Projections suggest that next year’s repayment requirements could escalate further to $33.84 billion.
Bangladesh Debt Profile (Fiscal Year 2024–25)
| Indicator | Amount (Billion USD) | % of GDP |
|---|---|---|
| Total Debt | 188.79 | 41.0 |
| Domestic Debt | 101.24 | 22.6 |
| External Debt | 87.55 | 18.4 |
| Domestic Debt Repayment | – | 4.2 |
| External Debt Repayment | – | 1.2 |
| Debt-to-Domestic Revenue Ratio | – | 89.4 |
Currently, 89.4% of domestic revenue is allocated solely to debt repayments, a proportion considerably higher than typical economic benchmarks. While the net increase in domestic debt has slowed to 0.3%, it is expected to average around 2% annually in the coming years.
The IMF has emphasised that such a high debt-to-revenue ratio elevates medium-term refinancing risks. Heavy reliance on government borrowing can crowd out private investment and increase the overall cost of debt. At present, the revenue-to-GDP ratio remains below 7%, limiting fiscal flexibility. The Finance Ministry has indicated that the next budget aims to raise this ratio to 8%. The IMF has further recommended strengthening primary dealer systems and boosting investment in government securities to enhance debt sustainability.
Former economic adviser Salehuddin Ahmed noted that while debt risk has moderated from “high” to “medium,” repayment pressures relative to export earnings and domestic revenue remain elevated. He suggested that the government focus on improving revenue collection and avoid high-interest commercial borrowing.
IMF analysis makes it clear that neglecting debt management could threaten Bangladesh’s future economic stability. The government faces a critical task: increasing revenue, maintaining debt balance, and accelerating economic growth to withstand the impending fiscal pressures.
This report underscores the urgent need for vigilance regarding the nation’s economic and debt policies.