In the world today, most governments get by on borrowed money. This borrowing is known as External debt or foreign debt. It is the total debt a country owes to foreign creditors complemented by internal debt owed to domestic lenders. This allows them to cover their shortfalls without increasing taxes or cutting back on public spending which could lead to negative perceptions about the government. But having too much debt can also hurt an economy, especially during a recession.
One way to think of government debt is in per capita terms. Over the years the external debt per capita has slowly crept up. External debt increased from USD 22.4 billion in 2014 to 25.96 billion in 2017. And keeping up with that, external debt per capita has increased from Tk 12,000 in 2014 to around Tk 13,500 as of 30th June 2016. And it is only expected to grow as external debt increases.
External debt also makes up 12 per cent of the country's GDP. In regards to external debt per capita and external debt as a percentage of GDP, Bangladesh ranks among one of the lowest in the world.
