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Media reports maintained this citing Bangladesh Bank’s latest data, as per which the total external debt reached $100.6 billion by the end of 2023, up from $96.5 billion the previous year.
Of this debt, $79.69 billion was accrued by the public sector, and the remainder by the private sector.
Around 85 per cent of the loans are long-term, leaving the remaining 15 per cent as short-term liabilities.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, expressed concern over the escalating external debt, suggesting an immediate halt to supplier credit from China and Russia to address the situation.
As external debt continues to rise, the challenges of repayment escalate, especially with the country’s sluggish revenue and foreign exchange earnings, as noted by Mansur, a former economist of the IMF.
Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), echoed similar sentiments, highlighting the surge in government spending on interest payments for foreign debt in the first five months of the fiscal year.
Rahman emphasised the impact of devaluation on the cost of foreign debt, stressing the necessity of utilising piled-up foreign loans for projects to mitigate rising servicing costs.
Meanwhile, the private sector’s foreign loans have declined by approximately 14 per cent, attributed to an increase in interest rates from 1-2 per cent to 8-9 per cent.
The central bank’s official highlighted the interest rate hike as a primary factor contributing to the decrease in private sector foreign loans.
These developments underscore the urgent need for prudent financial management to navigate the challenges posed by the burgeoning external debt and its implications on the country’s economic stability.
Fibre2Fashion News Desk (DR)