Bangladesh on the path of Pakistan! Foreign debt increased by 42% during Yunus era, alarm bells on the economy

Bangladesh Debt: When Nobel laureate Mohammad Yunus took over the power of Bangladesh, it was expected that the country would move towards new economic strength. But latest figures indicate that Bangladesh is also fast getting entangled in the debt trap like Pakistan.

According to the latest report of the World Bank, the country’s external debt burden has increased by 42 percent in the last five years. Not only this, the amount of principal and interest payments on external loans taken by both the public and private sectors has also doubled.

Bangladesh is struggling with external debt pressure

The report shows that Bangladesh has been struggling with increasing external debt pressure for a long time. The government took huge foreign loans in recent years for big projects. These include Roppur Nuclear Power Plant, Dhaka Metro Rail, power plants, new airport terminal, underwater tunnel and several elevated expressway projects. The loan repayment process for many of these projects has already begun, while other projects will also enter the repayment phase soon.

Interest burden is increasing rapidly

When asked about this increasing debt burden, Zahid Hussain, former Chief Economist of the World Bank Dhaka Office, told Protham Aalo that the dependence on foreign borrowing and the pressure of its repayment has been continuously increasing since the Covid-19 period. He said that now international partners are not giving loans on soft terms like before. “Due to short grace period, decreasing maturity and high interest rates, the principal and interest burden is increasing rapidly.

Big challenge for the government

Zahid Hossain also clarified that the increasing dependence on external debt is taking Bangladesh’s economy towards a risky situation. Earlier, Bangladesh was classified as ‘low risk’ in the reports of World Bank and IMF. category, it is now ‘moderate risk’ Has reached the category. This is an indication that maintaining economic stability will be a big challenge for the government in the coming years.

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Experts believe that decline in exports, dollar crisis and slow pace of foreign investment are also affecting the ability to handle the debt burden. If the government does not take concrete steps on revenue improvement, export growth and external debt management, Bangladesh’s economy may further weaken.