The total foreign debt held by Bangladesh has more than doubled over a period of 10 years, a World Bank report said.
In 2008, Bangladesh's total external debt stock was $23.4 billion which rose to $52.1 billion in 2018, an increase of 122.68 percent.
India's external debt saw a 129.57 percent rise during this period, and Pakistan's 83.08 percent.
Bangladesh owes these debts mainly to the World Bank, the Asian Development Bank, the International Monetary Fund, China and Japan.
The government has received the loans to implement big projects and
Loans from the World Bank, the Asian Development Bank and the Japan International Cooperation Agency have been concessional but loans from others were really expensive and of short terms compared to those of multilateral lenders.
Economists fear Bangladesh may face a debt burden after five to six years when repayment of expensive loans starts.
They suggest the government should be careful in the selection of projects and only those with good returns should be implemented.
Dr Ahsan H Mansur, executive director of the Policy Research Institute, told The Business Standard that the loan figures denote contractual obligations and are not disbursed amounts.
"The figures are from loan agreements that have been signed. Once the projects for which the loans were taken will be completed – let's say after four to five years – then the figures will become disbursed amounts," he explained.
Ahsan said our repayment capacity has also increased.
"The amount of loans has gone up, as the figures show. However, our earnings have increased as well.
"For example, our earnings from remittance and export have risen. This means our capacity to repay loans has also increased," said the economist.
"Even though this capacity has increased, we still need to be careful," he added.
During 2008-2018, Bangladesh's disbursements (long-term) jumped by 339.53 percent, principal repayments (long-term) 153.21 percent, and interest payments (long-term) 251.15 percent.
According to the Economic Relations Division data, the Bangladesh government paid back $1.34 billion to external lenders in the first 10 months of 2018-19 fiscal year, up by 14.4 percent than the amount paid during the corresponding period a year ago.
Bangladesh repaid $1.2 billion to its foreign lenders in 2017-18, according to the latest report on the "Flow of External Resources into Bangladesh" compiled by the Economic Relations Division.
Since independence, the country's foreign borrowing has been $51.83 billion till June 30, 2018. The government repaid $21.98 billion and the outstanding debt stood at $39.58 billion as of April this year.
In the 2019-20 budget, Tk4,273 crore was allocated for repayment of interests to foreign lenders, which is 0.82 percent of the total budget. Also, the amount of foreign loans for operating and development budget was Tk638.29 crore.
The government set a target to borrow $7.2 billion from foreign creditors in 2018-19. In nine months of the fiscal year, it borrowed $4.52 billion whereas the amount was $3.42 billion in the corresponding period last year.
The World Bank's International Debt Statistics 2020 report shows that an increasing share of countries are seeing a rise in their debt burden.
A growing appetite for yuan-denominated debt was behind a 15 percent surge in China's debt level, which helped push up the total, the World Bank said in a statement.
Excluding the top 10 borrowers, foreign debt rose by just 4 percent, the report said.
Borrowers in sub-Saharan Africa saw debt levels swell by 8 percent, while half the countries in the region have seen their external debt double over the past decade, the report said.
"To grow faster, many developing countries need more investment that meets their development goals," World Bank Group President David Malpass said.