STAR BUSINESS REPORT

Bangladesh’s external debt remained largely stable in the last quarter of 2025, with a slight increase mainly driven by public sector borrowing.

According to Bangladesh Bank (BB) data, the country’s gross external debt rose to $113.52 billion in October-December, from $112.22 billion in July-September -- an increase by $1.3 billion or over 1 percent compared to the previous quarter.

This reflects a relatively slow growth in debt in the final quarter, following fluctuations earlier in the year.

Public sector external debt grew from $92.56 billion in September to $93.46 billion in December, an increase of about $900 million, according to central bank data.

Within this, general government debt edged up to $80.94 billion from $80.48 billion, while government loans rose slightly to $80.36 billion from $79.86 billion, as spending on development projects remained slow.

As a result, foreign aid for development projects has not been disbursed despite a large pipeline of assistance, so overall foreign debt has not grown significantly.

Liabilities of other public corporations also increased, reaching $12.52 billion from $12.08 billion, highlighting the government’s ongoing reliance on external financing to support public spending and development projects.

Private sector external debt showed more variation. It fell in the September quarter to $19.66 billion from $19.84 billion in June, reflecting businesses’ cautious approach amid tighter external financing. However, the trend reversed in the final quarter, with private debt rising to $20.06 billion in December.

The increase was mainly due to short-term borrowing, as long-term debt remained flat, and investment activity has yet to pick up.

Short-term liabilities grew to $10.19 billion from $9.66 billion, with short-term loans rising sharply to $3.11 billion from $2.71 billion. Exposure through offshore banking units also rose during this period.

Meanwhile, long-term private sector debt edged down slightly to $9.87 billion from $10 billion, showing low demand for longer-term external financing.

In the public sector, long-term external liabilities remained concentrated in the central bank and state-owned enterprises.