In FY 2023–2024, Bangladesh’s repayment of foreign debt exceeded US$3.0 billion for the first time in a single fiscal year; around $1.0 billion of that amount is interest.
The nation owes approximately $3.36 billion in principle and interest on its foreign debt as of the end of FY 2023–2024.
The interest amount is roughly $1.35 billion, while the principal amount paid is $2.01 billion.
This data was obtained from the report on the updated foreign debt situation for the final fiscal year that the Economic Relations Division (ERD) released on Sunday.
According to the ERD figures, loan principal and interest payments have climbed dramatically in the last 12 months. In comparison to the previous fiscal year, this rise is 25% higher. In FY 2022–2023 Bangladesh paid $2.68 billion in principle and interest.
The last two years have seen the biggest growth in loan repayments. The nation has been dealing with a protracted foreign exchange problem at the same time that the demand to repay foreign loans began.
Experts surmise that the increased expenditure on repaying foreign debt is putting further strain on the budget and foreign exchange reserves.
In the previous fiscal year, interest expenses grew more quickly than the actual repayment of foreign debt, according to ERD.
Actual payments rose by $280 million, or 16%, in FY 2023–2024 compared to the prior fiscal year. Bangladesh paid back the principal amount of its foreign debt, totaling $1.73 billion, in FY 2022–2023.
Conversely, over the course of a year, interest payments have gone up by 45%. An extra $42 million had to be spent on interest payments in the most recent fiscal year.
For the fiscal year 2022–2023, interest payments totaled about $930 million. In the final fiscal year, interest costs alone topped $1.0 billion for the first time.
ERD data indicates that during the 2023–24 fiscal year, the amount of foreign debt received was around $9.86 billion. Compared to the previous fiscal year, 2022–2023—when development partners released $9.21 billion—this represented an increase of about $650 million.
In the meantime, lending organizations and nations committed $1.72 billion in loans for the fiscal year 2023–2024.
