Business Report :
Bangladesh spent $2.03 billion on external debt servicing, including paying off the principal and interest on foreign debt, in the first eight months of FY24.
Of the total, the interest payments amount to $805.9 million, while the payments towards principal were $1.22 billion.
In the first 8 months of the last FY23, debt servicing stood at $1.42 billion.
It means the amount has gone up by $610 million in the space of a year, or 43% year-on-year.
According to officials at the Economic Relations Division, or ERD, the sharp increase witnessed in debt servicing is driven mainly by increased interest payments on the debt.
The $805.9 million that has gone towards paying the interest on foreign loans is double what the government paid towards interest in the corresponding period of the last fiscal, when it was $403 million.
ERD records indicate loan commitments with development partners increased in the first eight months of the current fiscal.
These development partners pledged a total of $7.2 billion in various loan commitments from July 2023 to February 2024, the first 8 months of the current fiscal, which is up significantly from the $1.78 billion in loan commitments secured from July 2022 to February 2023, the first 8 months of the last fiscal.
What may surprise some observers, given the alarm that has been raised recently in some quarters over the country’s growing portfolio of foreign debt, is that rather than ease off for a period, ERD officials are determined to realize a target of $9.92 billion in loan commitments for the 12-month period.
