JAGARAN CHAKMA

Bangladesh’s external debt soared to $103 billion by the end of December 2024, doubling from $51 billion in fiscal year (FY) 2016–17, as the sharp increase in borrowing coincided with a rapid expansion of the economy.

During the period, the country’s gross domestic product (GDP) grew from $223 billion in FY17 to $450 billion in FY24, show the latest figures of the Bangladesh Bureau of Statistics (BBS).

Despite the rise in debt, the debt-to-GDP ratio remained almost unchanged, edging down slightly from 22.9 percent in FY17 to 22.8 percent in FY24.

Economists say this stability suggests that strong economic growth has effectively absorbed the additional debt, keeping the overall burden in check.

According to them, the debt doubling reflects a period of aggressive borrowing, largely to fund infrastructure and energy projects.

“While such investments can support long-term growth, the pace of debt accumulation, against a backdrop of global interest rate hikes and weakening foreign exchange reserves, raises questions about sustainability,” said Professor Selim Raihan, an economics professor at Dhaka University and also the executive director of the South Asian Network on Economic Modeling (Sanem).

The central bank’s latest report also shows a shift in borrowing patterns. While the government continues to account for the majority of external debt, which is around $84 billion, the private sector’s share has grown to $19 billion.