Bangla Press Desk: The pressure to repay foreign loans taken by previous governments is increasing on and on. For the first time, the interim government paid back more than $4 billion in foreign loans in the 2024-25 fiscal year. At the same time, the pressure to pay interest on these loans is also mounting. This pressure is expected to increase even further by the end of the current 2025-26 fiscal year.
Moreover, the interest rate on loans will rise after Bangladesh graduates from the list of Least Developed Countries (LDCs) next year, although Bangladesh will have at least four years of grace period after LDC graduation. The Election Commission has almost finalized its plan to hold the national election in February next year. As a result, a newly elected government will take charge of the country in the first half of the coming year. This will shift the challenge of repaying these foreign loans onto the shoulders of the new government. This information was sourced from the Finance Division.
Analysts say that the increasing foreign debt liability is creating a new challenge for the economy. Additionally, Bangladesh is now on the waiting list for LDC graduation, which is considered a near certainty, and there is no opportunity to apply for an extension. With the government planning to hold national elections in February, one of the first challenges the new government will face upon taking office is repaying foreign loans. This will also increase the pressure on foreign currency reserves.
Maintaining macroeconomic balance will be a difficult challenge. Dr. Zahid Hossain, former chief economist of the World Bank's Dhaka office, believes that macroeconomic balance is currently not in a stable condition. He told Bangladesh Pratidin that over the last 15 years, the previous government took loans for many unnecessary sectors and projects whose necessity has been questioned. As a result, repaying these loans is creating significant pressure on the country's economy.
Pressure to repay foreign debt mounts
Banglapress
Published: 23 September 2025, 10:26 AM
Bangla Press Desk: The pressure to repay foreign loans taken by previous governments is increasing on and on. For the first time, the interim government paid back more than $4 billion in foreign loans in the 2024-25 fiscal year. At the same time, the pressure to pay interest on these loans is also mounting. This pressure is expected to increase even further by the end of the current 2025-26 fiscal year.
Moreover, the interest rate on loans will rise after Bangladesh graduates from the list of Least Developed Countries (LDCs) next year, although Bangladesh will have at least four years of grace period after LDC graduation. The Election Commission has almost finalized its plan to hold the national election in February next year. As a result, a newly elected government will take charge of the country in the first half of the coming year. This will shift the challenge of repaying these foreign loans onto the shoulders of the new government. This information was sourced from the Finance Division.
Analysts say that the increasing foreign debt liability is creating a new challenge for the economy. Additionally, Bangladesh is now on the waiting list for LDC graduation, which is considered a near certainty, and there is no opportunity to apply for an extension. With the government planning to hold national elections in February, one of the first challenges the new government will face upon taking office is repaying foreign loans. This will also increase the pressure on foreign currency reserves.
Maintaining macroeconomic balance will be a difficult challenge. Dr. Zahid Hossain, former chief economist of the World Bank's Dhaka office, believes that macroeconomic balance is currently not in a stable condition. He told Bangladesh Pratidin that over the last 15 years, the previous government took loans for many unnecessary sectors and projects whose necessity has been questioned. As a result, repaying these loans is creating significant pressure on the country's economy.
[Bangla Press is a global platform for free thought. It provides impartial news, analysis, and commentary for independent-minded individuals. Our goal is to bring about positive change, which is more important today than ever before.]
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