Bangladesh’s cost of servicing external debt has risen further, with total repayments increasing by close to 10 per cent in the first nine months of the 2025–26 fiscal year compared with the same period a year earlier.
Data from the Economic Relations Division (ERD) show that between July and March, the government paid a combined US$3.525 billion in principal and interest on foreign loans. This compares with US$3.212 billion in the same period of 2024–25.
The upward movement in repayments reflects growing obligations arising from previously contracted external loans, many of which are now entering more advanced repayment phases.
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Composition of repayments
Out of the total external debt servicing in the first nine months of 2025–26, principal repayments accounted for US$2.2764 billion, up from US$2.011 billion a year earlier. Interest payments also increased slightly, reaching US$1.2486 billion compared with US$1.201 billion in the corresponding period of the previous fiscal year.
External debt servicing (July–March)
| Item | 2025–26 (US$) | 2024–25 (US$) | Variation |
|---|---|---|---|
| Total repayments | 3.525 billion | 3.212 billion | +9.7% |
| Principal | 2.2764 billion | 2.011 billion | +13.2% |
| Interest | 1.2486 billion | 1.201 billion | +4.0% |
The figures show that principal repayments are rising at a comparatively faster rate than interest payments, indicating an increasing repayment burden on earlier borrowings.
Fall in external inflows
While repayments have increased, external financing inflows have declined during the same period. According to ERD data, total disbursement of foreign loans and grants stood at US$3.8918 billion in the first nine months of 2025–26, down from US$4.8088 billion in the same period of the previous fiscal year.
Within this total, loan disbursements fell from US$4.4759 billion to US$3.5067 billion, reflecting a noticeable reduction in external funding support.
Commitments from development partners
New commitments from development partners also recorded a decline. Between July and March of the current fiscal year, total commitments amounted to US$2.8041 billion, compared with US$3.0053 billion in the corresponding period of 2024–25.
Selected development partner commitments
| Institution | Commitment (US$) |
|---|---|
| Asian Development Bank (ADB) | 1.27 billion |
| International Development Association (IDA) | 0.415 billion |
The Asian Development Bank remained the largest contributor of new commitments, followed by the International Development Association (IDA), which is part of the World Bank Group.
Broader financing context
ERD figures also indicate variation in disbursement sources, with Russia accounting for the highest level of fund disbursement during the first nine months of the fiscal year, although no detailed breakdown was provided in the report.
Overall, the data highlight a dual trend of rising external debt servicing obligations alongside declining inflows of foreign assistance and loans.