Bangladesh - Joint World Bank-IMF Debt Sustainability Analysis

Overview & Synopsis

Bangladesh remains at a moderate risk of external and overall debt distress, with limited space to absorb shocks. The change of risk from low in the June 2024 assessment to moderate was largely attributed to a substantial downward revision of export data for FY23 and FY24, which was carried forward over the projection period. Bangladesh’s debtcarrying capacity remains assessed as medium, consistent with the previous debt sustainability analysis (DSA).1 While external and overall debt indicators remain below their respective thresholds under the baseline scenario, the present value of debt-to-exports and debt service-to-exports ratios persistently breach their thresholds under a standard stress test, due to the downward revision of export data. Favorable debt dynamics in the medium term are expected to keep the public and publicly guaranteed (PPG) external debt-to-GDP ratio on a declining path, and space to absorb shocks would improve to “some space” from 2026 onwards.