Foreign loan commitments surge over 600%

Although foreign aid commitments made by global lenders to Bangladesh surged more than 600 percent in July-September of the current fiscal year, the disbursement declined. 

Figures from the Economic Relations Division (ERD) showed that it received pledges involving $2.88 billion in the first quarter, up more than 610 percent from $405 million in the identical three months of 2022-23.

Of the commitments, $2.79 billion came in the form of loans and the rest $90.53 million in the form of grants.

However, the disbursement declined nearly 5 percent to $1.28 billion in July-September of 2023-24. It was $1.34 billion in the first quarter of FY23.

A lower disbursement of foreign assistance is a perennial problem for Bangladesh, driven by the country's failure to implement projects on time and meet conditions attached with loans by lenders. 

The lower release of funds has prompted the government to order ministries to accelerate the use of loans with a view to giving a much-needed fillip to the foreign exchange reserves, which have halved in a span of two years.

The unused foreign assistance stood at $48 billion in July.

Among the multilateral and bilateral lenders, the Asian Development Bank committed $790 million in July-September. The World Bank offered to lend $300 million, Japan committed $1 billion, and others pledged $287.15 million.

In the quarter, the ADB disbursed $225.60 million, the WB $218.89 million, Japan $427.80 million, India $74.53 million, China $23.85 million, Russia $210.92 million, the Asian Infrastructure Investment Bank $5.57 million, and other lenders $85.56 million.

ERD figures showed the government repaid debts of $870.46 million in the first quarter of FY24. This consisted of $492 million in principal and $378.46 million in interest.

The repayment is up 65 percent from the $525.61 million serviced in the identical quarter of FY23.

In FY23, debt servicing repayment rose 32 percent to $2.67 billion, which included $928 million in interest payments.

The country's outstanding foreign debt stood at $95.71 billion in March, according to the central bank. Of the sum, the public sector owes $73.53 billion to their foreign lenders that also includes $61.89 billion in government debt.