Bangladesh’s external debt servicing surged 16 percent year-on-year in the first month of the current fiscal year (FY) 2025-26, while inflows from bilateral and multilateral lenders fell sharply.

Foreign loan repayment, which was hovering around $3 billion since fiscal 2012-13, crossed the $4 billion-mark for the first time last fiscal year on the back of high interest payments and short-term loans in the power and energy sector.

The government’s foreign debt repayment is expected to increase as much as 63 percent by fiscal year 2025-2026 from the last financial year, indicating renewed pressure on the country’s coffers