In the first two months (July-August) of the current fiscal year, the Bangladesh government saw a 98.24% drop in foreign aid commitments, receiving only $20.16 million compared to $1.14 billion during the same period last fiscal year.
"In July and August of the current fiscal year, the government secured $20.16 million in grant commitments but received no loan commitments from foreign sources. In contrast, during the same period in the 2023-24 fiscal year, the government secured $54.35 million in grants and $1.09 billion in loan commitments, totaling $1.14 billion in aid pledges," according to the Economic Relations Division (ERD) data.
The ERD report also revealed that, along with the decline in aid commitments, the disbursement of foreign aid has dropped by nearly 38% compared to the same period last year. Additionally, the amount spent on repaying old loans over the past two months has exceeded the disbursement of new aid by approximately 29%,
According to ERD officials, the current interim government is reviewing loan agreements made by the previous administration, causing delays in finalising agreements with development partners. However, they remain optimistic that once the review process is complete, the proposed loans will be processed, and commitments will be secured as expected.
Officials also noted that after the formation of the interim government, key multilateral and bilateral development partners, including the World Bank and the Asian Development Bank (ADB), have given preliminary assurances of loans and budget support for various projects in Bangladesh.
As part of this review process, the interim government has begun prioritising projects while halting those deemed unnecessary.
ERD has already instructed project-implementing agencies to submit a priority list of projects, along with details on their rationale, feasibility, and progress, by the end of this month.
In terms of aid disbursement, $458.24 million was disbursed during the first two months of this fiscal year, including $386.91 million in loans and $71.33 million in grants. In contrast, $739.07 million was disbursed during the same period of the previous fiscal year, with $727.24 million in loans and $11.83 million in grants.
Meanwhile, in the first two months of this fiscal year, Bangladesh repaid $589.2 million in principal and interest on foreign loans, of which $173.6 million went towards interest payments and $415.62 million for principal repayment. In the same period last fiscal year, the government repaid $400.5 million, including $146.39 million in interest and $254.11 million in principal payments.
