DHAKA, July 28, 2025 (BSS) – Bangladesh’s annual foreign debt repayment crossed $4 billion for the first time in the history of the country in the just-concluded fiscal year (FY25).

According to a report released by the Economic Relations Division (ERD), the country repaid around $4.087 billion in principal and interest amount to the development partners in FY25, marking the highest annual repayment on record. This represents a 21.2% increase from $3.372 billion paid in the previous fiscal year (FY24).

Analyzing the ERD data, it was found that principal repayments rose 28.8% year-on-year, amounting to $2.595 billion in FY25 compared to $2.02 billion in the FY24.

Interest payments also rose by 10.5%, reaching $1.491 billion in FY25, up from $1.349 billion in FY24.

ERD officials said the rise in debt servicing was due to the expiration of grace periods on large loans for infrastructure projects as well as budgetary support, taken over the past decade. 

While repayments surged, both fresh commitments and disbursements of foreign loans declined during the last fiscal year.

Bangladesh signed new loan agreements worth $8.323 billion with development partners in FY25, down from $10.739 billion the previous year, according to ERD data. 

Disbursements also fell to $8.568 billion in FY25, down from $10.283 billion in FY24.

The World Bank topped the list of foreign loan commitments in FY25, pledging $2.84 billion, including $1 billion in budget support. The Asian Development Bank followed with $2 billion, including $1.5 billion in budgetary support. Japan committed $1.89 billion, while the Asian Infrastructure Investment Bank (AIIB) pledged $561 million.

ADB also led disbursements, releasing $2.52 billion, followed by the World Bank with $2.012 billion. Other major disbursing partners included Japan ($1.58 billion), Russia ($675 million), AIIB ($527 million), China ($415 million), and India ($185 million).