Foreign aid commitment falls 60% in H1

The commitment of foreign aid inflow has declined by 60 per cent to $1762.21 million in the first half of FY23, when compared year-on-year.

Besides, the disbursement of foreign aid has also declined by 9 per cent in the July-December period compared to the previous FY, according to the provisional data of the Economic Relations Division (ERD).

ERD officials said the foreign aid commitments and disbursements have declined due to the slow implementation of the projects. They also said the fund disbursements have declined as loan deals for several development projects are waiting to be signed.

The country also received an amount of foreign aid commitment to the tune of $1,762.21 million in loans and grants in the July-December period this FY, mentions the ERD data, adding that the figure of commitment was $4,399.957 million in the same period of FY22.

Moreover, the major international development partners released loans and grants worth $3780.57 million in the July-December period of FY23, which was $4,175.95 million in the same period a year ago.

Of the total foreign aid disbursements, development partners disbursed $3,571.50 million in loans and $209.07 million in grants, ERD data shows. In the same period of previous FY, the government received $4,025.28 million in loans and $150.67 million in grants from the lenders.

Bangladesh had received a record over $10 billion foreign aid from the lenders in the FY22.

A senior official of ERD, on condition of anonymity, told The Business Post that the foreign aid disbursements have declined in the first half of this fiscal year as funds are stuck in the pipeline.

“Loan disbursements will increase further riding on better implementation of projects during the remaining period of this FY,” he added.

The Asian Development Bank disbursed $567.34 million, Japan $921.61 million and the World Bank released $540.37 million in the first half of this fiscal year.

Besides, Russia disbursed $439.81 million, China $535.06 million, Asian Infrastructure Investment Bank (AIIB) $250 million, India $163.52 million and others disbursed $362.86 million in the July to December of FY 23.

In July-December of FY23, the government repaid $1053.45 million to the development partners. The amount was $1040.38 million during the corresponding period last year.

Of the figure, the government repaid $778.33 million as principal of the outstanding loans while $275.12 million as interest in the first half of FY23.

During the period, the government paid $781.05 million as the principal of the outstanding loans while $259.33 million as interest on the same period in the last fiscal year.