Bangladesh’s per capita public debt could approach Tk 150,000 by the end of the 2026–27 fiscal year if the government’s borrowing trend continues, according to projections by the Finance Division.
The government’s total outstanding debt is projected to reach Tk 26.33 trillion by June 2027. Based on an estimated population of 175 million, the average public debt per person would stand at around Tk 150,000.
Finance Minister Amir Khasru Mahmud Chowdhury told parliament on September 6 that per capita public debt stood at Tk 129,239 as of March 31, 2026. The projected figure would represent an increase of approximately Tk 21,000 per person by the end of the current fiscal year.
However, per capita debt is an average calculated by dividing total government debt by the population. It does not mean that every citizen is personally liable to repay that amount.
Public Debt Projected to Rise 23% in Two Years
Government debt stood at approximately Tk 21.44 trillion at the end of the 2024–25 fiscal year, equivalent to 38.61% of gross domestic product (GDP).
Of the total, domestic debt accounted for around Tk 11.95 trillion, while foreign debt stood at approximately Tk 9.49 trillion.
The Finance Division projects that total government debt could rise to Tk 29.57 trillion by the end of the 2027–28 fiscal year and Tk 33.78 trillion by the end of 2028–29.
The finance minister has also indicated that Bangladesh’s debt risk has moved from the previous “low” category to the “moderate” category.
Foreign Debt Reaches $114.98 Billion
Bangladesh’s total external debt rose to a record $114.98 billion at the end of June 2026, up from $110.93 billion at the end of March, according to the latest Bangladesh Bank data.
The increase of $4.05 billion over three months represented growth of approximately 3.65%.
Public-sector external debt rose from $90.91 billion in March to $95.10 billion in June. Meanwhile, private-sector external debt declined by $140 million to $19.88 billion.
At an exchange rate of Tk 123.20 per dollar, the country’s total external debt was equivalent to approximately Tk 14.16 trillion.
Around 87.52% of the external debt was long-term, amounting to $100.64 billion. Short-term external debt stood at $14.35 billion.
Multilateral development partners, including the World Bank and the Asian Development Bank (ADB), accounted for $48.96 billion of the debt. Bilateral lenders accounted for $32.54 billion, commercial borrowing for $10.60 billion and the International Monetary Fund (IMF) for approximately $5.97 billion.
Foreign Loan Disbursements Fall 61%
Bangladesh received $294.5 million in foreign loans and grants during July and August, the first two months of the 2026–27 fiscal year, according to the Economic Relations Division (ERD).
The amount was around 61% lower than the approximately $750 million disbursed during the same period of the previous fiscal year.
The ADB provided the largest share, at approximately $128.7 million, followed by the World Bank with $73.9 million and Japan with around $40 million.
New loan commitments during the two-month period totalled only $240 million.
Meanwhile, Bangladesh spent $698.9 million repaying the principal and interest on existing foreign loans. Of that amount, $516 million went towards principal repayments and more than $182.8 million towards interest.
Debt servicing was therefore approximately 2.4 times the amount of new foreign assistance disbursed during the period, resulting in a negative net flow of around $404 million.
The ERD has previously projected that Bangladesh’s annual principal and interest payments on foreign loans could reach a record $5.3 billion in the current fiscal year. Repayment of the principal on loans taken from Russia for the Rooppur Nuclear Power Plant is scheduled to begin in March 2027.
Government Borrowing from Banks Increases
The government is also relying increasingly on domestic borrowing to finance its expenditure.
Bangladesh Bank data show that the government’s outstanding borrowing from commercial banks reached Tk 608,025 crore as of August 30, up from Tk 591,424 crore at the end of June.
Government borrowing from Bangladesh Bank, however, declined from Tk 94,051 crore at the end of June to Tk 90,322 crore on August 30.
Overall, the government’s net borrowing from the banking sector reached approximately Tk 13,000 crore during the first two months of the fiscal year, more than five times the amount borrowed during the corresponding period a year earlier.
The government has set a target of borrowing Tk 112,000 crore from the banking sector in the 2026–27 budget. By the end of the first two months, it had already borrowed an amount equivalent to 11.49% of that target. The figure reportedly rose to around Tk 24,000 crore in the first three months, including September.
Increased government borrowing could constrain credit availability for private businesses and investors, depending on banks’ liquidity, credit demand and interest rates.
Interest Payments to Consume 14% of Budget
Bangladesh’s budget for the 2026–27 fiscal year totals Tk 938,000 crore, with a revenue collection target of Tk 695,000 crore, leaving a projected deficit of Tk 243,000 crore.
The government plans to finance the deficit through domestic and foreign borrowing.
Around Tk 127,000 crore has been allocated for interest payments during the current fiscal year, equivalent to approximately 14% of the total budget. The Finance Division projects that annual interest expenditure could rise to around Tk 162,000 crore by the end of the 2028–29 fiscal year.
Meanwhile, Bangladesh’s banking sector continues to face a high volume of non-performing loans. According to Bangladesh Bank data, defaulted loans reached Tk 606,555 crore at the end of June 2026, accounting for 32.78% of total outstanding loans.
The figure increased by Tk 17,851 crore from Tk 588,704 crore at the end of March.
CPD Fellow Warns of Debt Sustainability Risks
Dr Fahmida Khatun, distinguished fellow at the Centre for Policy Dialogue (CPD), told Bangla Tribune that the prospect of per capita public debt approaching Tk 150,000, alongside rising external debt, was understandably a source of concern.
She stressed, however, that the per capita figure did not mean each citizen would have to repay that amount directly. Rather, the burden of servicing government debt ultimately falls on the national budget, which is financed largely through taxes and other public revenues.
The key issue, she said, was how borrowed funds were being used and whether they were generating the capacity needed to repay the debt.
Borrowing for productive infrastructure, education, healthcare, energy security and employment creation could benefit the economy in the long run. But wasteful spending, weak project planning, implementation delays and lower-than-expected returns could limit those benefits while increasing pressure on public finances.
Khatun also highlighted the risks associated with exchange-rate movements, interest rates and repayment schedules. A depreciation of the taka increases the domestic currency cost of repaying foreign-currency loans.
She called for regular disclosure of information on borrowing terms, the use of funds, project outcomes and the government’s future repayment capacity, urging citizens to demand transparency and accountability rather than panic over headline debt figures.
Government Outlines Debt Management Measures
The government has said it intends to strengthen revenue collection, improve public financial management and impose greater discipline on borrowing to contain the debt burden.
According to the finance minister’s parliamentary statement, planned measures include increasing tax and non-tax revenue, controlling unnecessary and low-priority expenditure, reforming the domestic debt and government securities markets, and limiting excessive borrowing through savings certificates.
The government also plans to formulate and follow annual borrowing plans to avoid unplanned debt accumulation.
With public debt, foreign loan repayments and interest expenditure all projected to rise, the effectiveness of these measures will be crucial in determining whether Bangladesh can finance development priorities while maintaining debt sustainability.
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