The finance ministry has planned to establish a debt management office to address the challenges of institutional disintegration that has hampered the government loan management, said its officials.
Economists, however, said that the separate debt office should be an efficient one and it should not be a 鈥榬ehabilitation centre鈥� for bureaucrats in the sense that it would not serve the purpose of creating new posts for serving and retired government officials.
Currently, Internal Resources Division, External Resources Division and Bangladesh Bank mainly are engaged in obtaining external and internal debts for the government amid concerns over the debt servicing.
The debts rose sharply to $156 billion from $33.66 billion in 2009-2024 under the Awami League regime ousted on August 5, 2024, in the wake a mass uprising.
The overall debts, $88 billion from domestic sources and the rest $68.33 billion for external sources, have been supervised by the treasury and management wing under the Finance Division and the ERD, said the officials.
The officials also said that the planned separate debt management office would primarily deal with the internal debts to end institutional disintegration and would be turn into a division in the long run.
The internal debts are channelled to the Finance Division through the Internal Resources Division and its body 鈥� the Department of National Savings 鈥� and Bangladesh Bank.
The External Resources Division that looks after the external debts from the multilateral and bilateral lenders will continue to work side by side with the planned debt office in the initials years, said the officials.
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, opposed the plan for a separate division.
鈥楾he target should be an efficient debt management,鈥� said the economist, lamenting over the existing burdensome administration in the country.
Economists said that reforms such as the automation of national savings certificates and the issuance of Sukuk bonds had already been implemented while the Public Debt Act, 2022 was enacted aiming at efficiency in debt management.
But, all these could not prevent degradation in the outlook of the country鈥檚 debt risk.
In August 2025, a joint report by the International Monetary Fund and the World Bank said that Bangladesh鈥檚 risk of external and overall debt distress was now moderate, an increase from a previous assessment of low risk.
One of the major reasons for the increasing debt risk is inefficient debt management amid fiscal and structural challenges which eventually led to depreciation of the local currency against the US dollar by about 40 per cent over the past three years.
Bangladesh鈥檚 external debt repayment obligations are projected to be about $5 billion in the current financial year of 2025鈥�26, compared with those of $4.086 billion in FY25 and $3.36 billion in FY24.
Economists said that the country鈥檚 growing debt risk on the external level had been linked to utilisation of loans taken from the external and internal sources to meet the annual budget deficit.
If the loans become unproductive and fail to generate more revenue and exports, the country鈥檚 debt distress will grow further, said former World Dhaka office chief economist Zahid Hussain.
In this respect, the country cannot afford mismanagement in debt management, he said while indicating to the external loan spree during the past regime for implementing politically motived and unnecessary projects.
MK Mujeri underscored the need to build a stronger professional base by increasing the number of skilled experts with in-depth knowledge of debt management ahead of the country鈥檚 graduation from the least developed countries鈥� bloc in November 2026.
Scopes for external borrowings on low interest rate will be slim after the graduation, said the economist, adding that the focus should now be shifted to domestic borrowing.
However, the government is in an uncomfortable position as the interest payments against the internal debts have more than doubled in eight years.
The projected interest payments have reached Tk聽1,00,000 crore in the current financial year of 2025-26, compared with Tk聽45,278 crore in FY2019, according to the budget document.