Bangladesh has so far avoided a public debt default, but clear warning signs demand immediate and strategic action to safeguard the country’s fiscal sustainability, according to the latest outlook by the Asian Development Bank.

Public debt soared to a record during the pandemic, topping global gross domestic product. Now, with government debt still elevated, the rise in interest rates and the strong US dollar is adding to interest costs, in turn weighing on growth and fueling financial stability risks.

Debt servicing has become a rising concern for developing countries in recent times.