External debt falls slightly in Jul-Sept quarter

Bangladesh's gross external debt fell slightly at the end of July-September quarter as both public and private sector borrowing declined.

By the end of September 2025, the country's external debt stock stood at $112.12 billion, down from $113.56 billion at the end of June, according to the latest data from Bangladesh Bank.

However, compared to a year earlier, debt rose by 7 percent, or $7.75 billion, from $104.37 billion at the end of September 2024.

"Generally, there are two reasons why external debt declines -- higher repayments and reduced borrowing," said Fahmida Khatun, executive director at the Centre for Policy Dialogue.

"External debt had been rising earlier due to the implementation of numerous mega projects. However, during the tenure of the interim government, work on many mega projects has been suspended, and the government is not taking up any new projects. This is why external debt is now declining," she added.

The public sector remained the largest borrower, accounting for $92.54 billion, or more than four-fifths of Bangladesh's total external debt as of September 2025, data showed.

Within the public sector, general government borrowing reached $80.48 billion, most of it long-term debt. Government loans alone stood at $79.87 billion, while government bonds fell to $614.81 million, continuing a year-long decline, according to Bangladesh Bank.

Borrowing by other government corporations, including state-owned enterprises, was $12.06 billion, down from $13.22 billion in June 2025. Short-term liabilities in this category dropped sharply to $3.21 billion, easing some immediate repayment pressure.

The private sector's external debt stood at $19.58 billion in September, slightly lower than in June. Short-term private sector debt fell to $9.62 billion, mainly due to a drop in trade credit and buyer's credit, reflecting weaker import demand or tighter external financing.

Bangladesh Bank data also shows that offshore banking units continued to be an important source of external borrowing for the private sector, especially for short-term and trade-related financing.

"Our external debt-to-GDP ratio is still within a manageable range and is not very high," said Mati Ul Hasan, managing director of Mercantile Bank.

"However, external debt is increasing. Since there is no elected government, there are not many development projects, and as a result, the pace of growth in foreign borrowing has slowed," he added.