Foreign aid inflow declines 24% in Jul-Aug

The inflow of foreign aid declined by 24 per cent to $864 million in the first two months of FY 2022-23 when compared year-on-year.

The major international development partners released $864.29 million in loans and grants in July-August of FY23, which was $1142.93 million in the same period a year ago, according to the latest data from the Economic Relations Division (ERD).

The government got $278.64 million lower in foreign aid in the first two months of this fiscal year compared to the same period of the last fiscal year.

Of the total foreign aid disbursement in the last two months of the current fiscal year, the development partners disbursed $832.88 million in loans and $31.41 million in grants, the ERD data shows.

In the same period of the previous fiscal year, the government received $1,108.75 million in loans and $34.18 million in grants from lenders.

The country also received a significant amount of foreign aid commitment to the tune of $304.92 million in loans and grants in July-August of this fiscal year, according to the ERD data. The figure of commitment was $73.32 million in the same period of FY22.

Meanwhile, Bangladesh received a record over $10 billion in foreign aid from lenders in FY 22.

A senior official of ERD told The Business Post that the foreign aid disbursement has declined as funds are in pipeline. The disbursement will increase further, he said, adding that the disbursement has increased than the commitment.

The official also said loan disbursement will increase further riding on better implementation during the remaining period of this fiscal year.

“The bilateral and multilateral development partners like the Asian Development Bank (ADB), the World Bank, Japan International Cooperation Agency, China and India provide concessional loans every year for the development of Bangladesh,” he also said.

“We have received record foreign aid in the last fiscal year. The government is in comfort as the development partners are disbursing funds for completing the ongoing development projects in the country,” he added.

The Asian Development Bank disbursed $135.92 million, Japan International Cooperation Agency (JICA) $329.10 million and the World Bank released $94.13 million in the first two months of this fiscal year.

Besides, Russia disbursed $4.11 million, China $187.19 million, Asian Infrastructure Investment Bank (AIIB) $1.71 million, India $71.89 million and others disbursed $40 million in the July of FY 23.

In July-August, the government repaid $289.78 million to the development partners. The amount was $298.22 million during the corresponding period last year. Of the figure, the government repaid $196.98 million as principal of the outstanding loans while $92.80 million as interest in the first two months of the fiscal year. During the period, the government paid $213.28 million as the principal of the outstanding loans while $584.94 million as interest on the same period in the last fiscal year.