Bangladesh's external debt reaches $78.22b, repayment burden to rise in coming years: Khosru
Bangladesh's access to highly concessional financing has gradually declined since its transition from a low-income to a lower-middle-income country, according to the World Bank’s 2015 assessment.
Finance Minister Amir Khosru Mahmud Chowdhury has said Bangladesh's total external debt stood at $78.22 billion as of March this year, warning that the country's debt servicing obligations are about to increase in the coming years.
The minister disclosed the information during the question-and-answer session in parliament today (24 June), in response to a written question from Jamaalpur-3 lawmaker Mostafizur Rahman Babul.
According to the minister, Bangladesh's total external debt amounted to $78.22 billion, of which 61.97% was concessional borrowing and 38.03% was non-concessional debt.
Keep updated, follow The Business Standard's Google news channel
Highlighting key challenges in external debt management, Khosru said Bangladesh's access to highly concessional financing has gradually declined since its transition from a low-income to a lower-middle-income country, according to the World Bank's 2015 assessment.
At the same time, the volume of foreign borrowing has increased significantly over the years, resulting in a growing burden of principal and interest repayments in the future, he added.
The finance minister said the government has adopted a number of precautionary measures to ensure sustainable debt management. "Proposals for new foreign loans and related development projects are being scrutinised more rigorously to avoid financing unnecessary or low-priority projects through high-interest external borrowing."
"Only projects with high economic returns are being considered for foreign financing," he told parliament.
Khosru also informed that the government has intensified monitoring of foreign-funded projects to curb the long-standing practice of project delays and cost overruns.
In addition, the government is updating its Medium-Term Debt Management Strategy (MTDS) and conducting a Debt Sustainability Analysis (DSA) to strengthen the resilience and sustainability of public debt management, he said.
The minister further said work will soon begin on a broader plan for institutional and legal reforms aimed at improving the overall quality and effectiveness of the country's debt management framework.
