Bangladesh's external debt has started to decrease as a result of credit rating downgrade and USD shortage, with the amount going down by $1.34 billion to $99.30 billion at the end of March this year, according to the latest data from Bangladesh Bank released Monday.
At the end of December last year, for the first time in the country’s history, the foreign debt position exceeded the $100 billion mark and settled at $100.64 billion.
However, due to the USD shortage, the government became cautious about fresh borrowing from external sources.
On the other hand, various international rating agencies have downgraded Bangladesh's credit rating. As a result, lenders are now more cautious to clear more lending.
Moreover, due to the downgraded credit rating, it is feared that the cost of existing loans will increase. That is why the private sector is also reluctant to take new foreign loans.
Experts believe that due to these reasons, the amount of external debt decreased slightly in March, compared to December last year.
According to the central bank data, the stock position of the private sector’s external debt declined by $646.58 million to $20.29 billion in March, compared to December 2023.
On the other hand, the public sector’s external debt position declined by $689.28 million to $79 billion at the end of March this year, compared to December 2023.
The data showed that the total stock position of Bangladesh’s foreign debt in FY2016-17 was only $45.81 billion and it more than doubled to exceed $100 billion in December last year.
Experts said that the amount of external debt increased mainly due to the loans taken by the government for the implementation of mega projects.
However, the debt-GDP ratio is still at a tolerable level. This ratio was 21.60 per cent in FY2022-23, where the public sector debt-GDP ratio was 16.70 per cent and the private sector 4.90 per cent.
