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Bangladesh Foreign Debt Nears $115 Billion as Poverty and Costs Rise
Bangladesh’s foreign debt rose 3.65% to nearly $115 billion in April-June 2026, as public borrowing increased and poverty and living costs remained concerns.
ByGobind Arora
Published on: 13 Oct 2026 8:30 AM IST
Bangladesh’s foreign debt increased by 3.65% to $114.98 billion at the end of April-June 2026, according to Bangladesh Bank data Public-sector debt rose by $4.19 billion, while private-sector foreign debt fell slightly. The increase comes as Bangladesh faces concerns over rising prices, power shortages, job losses and growing poverty, putting pressure on its economic priorities
Why Has Bangladesh’s Foreign Debt Increased?
Bangladesh’s total foreign debt rose during the April-June quarter after the government secured fresh financial support from international and bilateral partners. This funding helped the country manage economic pressure linked to the conflict in the Middle East.
The money included budget support from organisations such as the World Bank and the Asian Development Bank. Such support can help a government meet spending needs and manage pressure on public finances.
However, borrowing also adds to the country’s repayment commitments. The challenge for Bangladesh is to use the money in ways that support economic growth and help people facing rising living costs.
Public Debt Rises While Private Debt Falls
Bangladesh Bank figures show that public-sector foreign debt increased to $95.10 billion by the end of June 2026. That was $4.19 billion higher than in the previous quarter.
Private-sector foreign debt moved in the opposite direction. It fell by around $140 million to $19.89 billion during the same period.
Earlier, public-sector foreign debt had declined from $93.74 billion in June 2025 to $90.91 billion at the end of March 2026. The Daily Star report linked that earlier fall partly to slow progress on development projects funded by foreign loans.
The latest increase suggests that public borrowing has picked up again. Meanwhile, the fall in private-sector debt was linked to lower short-term loans, buyer’s credit and trade credit. These forms of borrowing are often used by businesses to pay for imports and manage their day-to-day financial needs.
Are Rising Prices Making Life Harder?
Debt is only one part of Bangladesh’s economic challenge. A separate report by The Financial Express raised concerns about poverty and the unequal distribution of wealth.
According to that report, around 2.1 million people fell into poverty during the last fiscal year. This points to the difficulties many households face as the cost of basic goods and services rises.
The report also referred to a World Bank projection that persistent inflation and an energy crisis could push another 62 million people worldwide into poverty. This is a global estimate, not a figure for Bangladesh alone.
For families already struggling to pay for food, transport and other essentials, rising prices leave less money for education, healthcare and savings.
Power Shortages Put Businesses Under Pressure
Bangladesh’s energy problems are also affecting its economy. Power shortages can disrupt factory work, increase operating costs and make it harder for businesses to meet production targets.
Manufacturing companies may respond by reducing investment, slowing production or cutting jobs. Workers in private businesses and the informal sector can be especially vulnerable because they may have limited financial security.
When people lose jobs or earn less, household spending often falls. That can hurt local businesses and create further pressure on economic activity.
Why Is Inequality Becoming a Concern?
The Financial Express report criticised economic priorities that may leave poverty reduction behind. It argued that major infrastructure projects and defence purchases risk receiving attention while support for poorer households remains inadequate.
Large projects can contribute to long-term development, but their benefits depend on how well they are planned and who gains from them. If economic growth does not create enough jobs or improve living standards, many families may continue to struggle.
The widening gap between rich and poor is another concern. The report said wealth inequality showed little sign of easing under the current system.
What Lies Ahead for Bangladesh?
Bangladesh faces the difficult task of managing foreign debt while supporting households and keeping businesses running. International loans can provide immediate financial support, but long-term progress will also depend on productive investment, reliable power supplies and stronger job opportunities.
The rise in foreign debt does not, by itself, show the full state of the economy. What matters next is whether the borrowed funds help improve economic stability and living conditions. For ordinary Bangladeshis, controlling inflation, protecting jobs and reducing poverty will remain important measures of progress.
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Gobind Arora
Gobind Arora is a professional news writer and editor with proven expertise in breaking news, viral stories, and high-traffic digital journalism. With years of experience in content creation, he crafts impactful articles that generate millions of views across categories like politics, entertainment, weather, sports, and world affairs. He specializes in SEO-rich headlines, user engagement, and news formats that readers love to share. Known for delivering fast, accurate, and trend-driven news, Gobind ranks among top-performing news content creators. His editing skills ensure clarity, originality, and Google-friendly content that drives massive organic reach. Gobind’s news stories are widely read, deeply trusted, and consistently appear in top search results.
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