Bangladesh’s Debt Servicing Costs Rise, Loan Inflows Decline

Bangladesh’s payments on foreign loans jumped 16 percent in the opening month of the 2025–26 fiscal year, even as new inflows from bilateral and multilateral lenders slowed sharply.

According to provisional figures from the Economic Relations Division (ERD), the country repaid $446.68 million in July 2025, up from $385.67 million in the same month last year.

The rise was driven mainly by higher principal repayments, which climbed to $327.72 million compared with $264.88 million a year earlier — a 24 percent increase. In contrast, interest payments eased slightly, falling to $118.96 million from $120.79 million in July 2024.

In local currency terms, external debt servicing reached Tk 5,448 crore in July 2025, against Tk 4,548 crore in the previous year.

On the other hand, fresh inflows of project aid fell notably. Bangladesh received only $202.75 million in July, which is 43 percent lower than the $358.32 million received during the same month last year.

New foreign aid commitments also remained muted, with the ERD reporting pledges of just $83.46 million in July 2025, compared to $16.40 million in July 2024. Most of the fresh pledges were in the fo

rm of loans.