Foreign aid inflow drops 25% in July-October

The foreign aid inflow has declined by 25 per cent to $1,970.61 million in the first four months of FY 23 compared year-on-year.

Besides, foreign aid commitment has significantly declined by 85 per cent in July-October compared year-on-year, according to the provisional data of the Economic Relations Division (ERD) released on Thursday.

The major international development partners released $1,970.61 million in loans and grants in Jul-Oct of FY23, which was $2,626.18 million in the same period a year ago, the ERD data showed.

Of the total foreign aid disbursement, the development partners disbursed $1,877.80 million in loans and $92.81 million in grants, it also said.

In the same period of the previous fiscal year, the government received $2,551.05 million in loans and $75.13 million in grants from the lenders.

On the other hand, the country also received an amount of foreign aid commitment to the tune of $413.81 million in loans and grants in July-October of this fiscal year, the ERD data shows. The figure of commitment was $2,761.55 million in the same period of FY22.

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

A senior official of ERD told The Business Post that the foreign aid disbursement has declined as funds are in the 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 of projects during the remaining period of this fiscal year.

“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 a comfort situation as development partners are disbursing funds for completing the ongoing development projects in the country,” he added.

The Asian Development Bank disbursed $240.77 million, Japan $580.69 million and the World Bank released $365.23 million in July-October.

Besides, Russia disbursed $82.82 million, China $453.73 million, Asian Infrastructure Investment Bank (AIIB) $7.85 million, India $119.13 million and others disbursed $120.39 in July to October of FY 23.

In July-October, the government repaid $724.27 million to the development partners. The amount was $749.17 million during the corresponding period last year. Of the figure, the government repaid $536.54 million as principal of the outstanding loans while $187.73 million as interest in the first four months of the fiscal year.

During the period, the government paid $554.04 million as the principal of the outstanding loans while $195.13 million as interest on the same period in the last fiscal year.