Bangladesh external debt has almost tripled in 10 years to $113 billion, a steeper rise than in any other South Asian country except the Maldives, according to the World Bank.
The World Bank’s International Debt Report 2026 puts Bangladesh’s total foreign debt at $113 billion at the end of 2025, up from about $38 billion in 2015. For every $100 the country earns in a year, it carries $210 in debt and pays back $16.
Economists say the indicators are manageable for now, but Bangladesh could face repayment trouble if borrowing keeps growing at this pace and the money is not used well.
Bangladesh external debt servicing takes 16pc of exports
Debt servicing took 16 per cent of Bangladesh’s export earnings in 2025, 3.1 percentage points less than the year before. That is the share of export income spent on repaying principal and interest on foreign loans, and a falling ratio points to stronger repayment capacity.
Even so, it remains above India and the South Asian average of 10 per cent, though below Sri Lanka at 26 per cent and Bhutan at 19 per cent. Against gross national income, servicing costs are 2 per cent, matching India and the regional benchmark.
The debt-to-GNI ratio stands at 24 per cent, slightly above the South Asian aggregate of 21 per cent, and 20 per cent in India, 41 per cent in Pakistan and 54 per cent in Sri Lanka. Set against exports, the debt looks heavier, at 210 per cent of Bangladesh’s annual exports, far above India at 83 per cent and the South Asian aggregate of 95 per cent, but below Pakistan at 324 per cent, Bhutan at 301 per cent and Sri Lanka at 272 per cent.
How Bangladesh compares with Pakistan and India
India holds the largest external debt stock in South Asia at $764 billion, up 59 per cent in a decade. Pakistan follows at $135 billion, almost double the level of 10 years ago. Feature Pakistan reported in November that Pakistan’s external debt nearly doubled to $135bn, according to the same World Bank report.
| Country | External debt | Change in a decade |
|---|---|---|
| India | $764 billion | Up 59pc |
| Pakistan | $135 billion | Almost doubled |
| Bangladesh | $113 billion | Almost tripled |
| Sri Lanka | $57 billion | Up 31pc |
| Nepal | $11 billion | Up 186.5pc |
| Bhutan | $3.3 billion | Up 57pc |
| Maldives | $4.7 billion | More than fourfold |
Bangladesh’s debt grew faster in percentage terms, but Pakistan carries the heavier burden on the measures that matter for repayment. Pakistan’s debt equals 324 per cent of annual exports and 41 per cent of national income, against 210 per cent and 24 per cent for Bangladesh.
Warning on borrowing
Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, said Bangladesh still does better than Pakistan and Sri Lanka on these indicators but trails India. “If foreign debt keeps growing at the current pace, it would not be surprising if Bangladesh eventually faced a situation similar to Sri Lanka’s,” he said.
He said comparing Bangladesh with Pakistan is difficult, given Pakistan’s particular geopolitical and strategic situation.
Zahid said the export ratio matters most, because the debt-to-GDP ratio says little about a country’s ability to repay.
Bangladesh is also vulnerable because its export base is small and heavily dependent on a single product category, he said.
Prof Mustafizur Rahman, a distinguished fellow at local think tank Centre for Policy Dialogue, said the debt-to-GDP and debt-to-export ratios are rising gradually, but the most important indicator is the ratio of net exports to debt servicing.
About 85 per cent of export earnings come from readymade garments, where domestic value addition is 60-65 per cent, so the ratios would be significantly higher on net exports, he said.
Recent loans carry relatively high interest rates and shorter repayment and grace periods, so the ratios will rise rapidly in the coming years, said Mustafizur. Government debt servicing was $4.9 billion in the last fiscal year and is projected to reach $7.6 billion by 2029.
He said Bangladesh needs to raise exports and domestic value addition, improve domestic resource mobilisation and borrow less. “Global financing conditions are tightening. Bangladesh will still need foreign loans, but should negotiate better terms and secure more concessional financing,” he said, adding that it could also consider raising funds through bond issuance.
Developing world debt hits a record $9.4 trillion
According to the World Bank report, foreign debt of developing countries rose 5.5 per cent to a record $9.4 trillion in 2025, the fastest growth since 2021 and about four times the average pace of 2022-24.
Low and middle-income countries paid $1.4 trillion in debt service in 2025, the fifth annual rise in a row.
Frequently asked questions
How much is Bangladesh’s external debt?
Bangladesh’s total foreign debt stood at $113 billion at the end of 2025, up from about $38 billion in 2015, according to the World Bank’s International Debt Report 2026.
How much of export earnings goes to debt servicing?
Debt servicing took 16 per cent of Bangladesh’s export earnings in 2025, down 3.1 percentage points from the year before. The country pays back $16 for every $100 it earns.
How does Bangladesh compare with Pakistan?
Pakistan’s external debt is $135 billion, almost double the level of 10 years ago. Pakistan’s debt equals 324 per cent of annual exports and 41 per cent of national income, against 210 per cent and 24 per cent for Bangladesh.
What do economists warn about Bangladesh’s debt?
Economists say the indicators are manageable for now, but Bangladesh could face repayment trouble if borrowing keeps growing at this pace and the money is not put to proper use. Zahid Hussain warned it could eventually face a situation similar to Sri Lanka’s.
What does the World Bank say about developing-country debt?
The World Bank says foreign debt of developing countries rose 5.5 per cent to a record $9.4 trillion in 2025. Low and middle-income countries paid $1.4 trillion in debt service in 2025, the fifth consecutive annual rise.
