Per capita external debt increased by $22.05

Bangladesh’s per capita external debt increased by $22.05 to $579.28 (equivalent to Tk 63,048) in last fiscal year. It was $557.23 in the previous fiscal year.

 

According to Bangladesh Bank data, in last five fiscal years, per capita debt increased by 53 per cent. In FY19, such debt was $378.2 or Tk 31,776.

 

Total external debt almost doubled in last five fiscal years and such loan reached 21.8 per cent of gross domestic product (GDP) in FY23.

External debt has increased at a time when the country's foreign exchange is under pressure and forex reserves continue to drop. However, short-term external debt declined by 29 per cent to $16.03 billion in FY23 compared to previous FY.   

The data also showed that the public sector took $76.67 billion in foreign credit at the end of June 2023, with $64.57 billion borrowed directly by the government and the rest by various government institutions.

 

Short-term foreign loans in the private sector increased again to $22.25 billion in June from $22.18 billion in March. However, buyers’ credit dropped to $7.68 billion in June from $8.13 billion in March 2023.

 

Usually, external debt is deemed risky when it exceeds 40 per cent of GDP, economists said.

 

A country’s external debt refers to the total amount of money that the country owes foreign creditors such as foreign countries, international organisations and foreign private entities. It includes both public and private debt obligations.

 

Bangladesh usually receives foreign loans from multilateral institutions such as the World Bank, the International Monetary Fund, the Asian Development Bank, the Islamic Development Bank, and major overseas commercial banks.