Bangladesh has reached a milestone in foreign borrowing, touching the mark of $100 billion (10 thousand crore).
Among this, the government and its enterprises account for $79 billion in foreign debt. The remaining $21 billion is owed by private entities within the country.
Approximately 84% of these loans are of a long-term nature, while the remaining 16%, or $16 billion is short-term debt.
Data updated until September last year by the Bangladesh Bank indicates a significant surge in foreign loans from various sources.
The total foreign debt has risen by nearly 70% over the past decade. By the end of the fiscal year 2021-2022, the nation’s foreign debt stood at $98.94 billion.
According to the central bank’s statistics, about 22% of the country’s GDP accounts for the combined foreign debt of the government and non-government sectors. Officials from Bangladesh Bank suggest that despite the $100 billion foreign debt mark, this amount isn’t excessively burdensome when compared to the size of the GDP.
However, concerns arise as the current exchange rate of the dollar against the local currency has significantly increased, affecting the nation’s reserves.
Measures have been taken by the central bank to curb the dollar shortage, yet this persists as evident from the decline in reserves over the last two years.
The economic instability has also affected financial accounts, resulting in a notable shortfall. Despite a decrease in significant imports, there remains an influx of dollars into the country, significantly impacting the financial accounts and reserves.
Economists suggest that while this financial situation is alarming, it’s crucial to differentiate between economic challenges and political concerns.