Bangladesh’s foreign loans up 19% in FY21

The country’s foreign borrowing rose by 18.72 per cent to $78.03 billion in fiscal 2020-21 amid slowed down economic activities caused by the Covid-19 pandemic.

At the end of June this year, the country’s gross foreign loans stood at $78.03 billion, up from $65.73 billion in the same period a year ago, according to the latest data from the Bangladesh Bank.

Experts and Bankers said that the foreign loans increased owing to the financing of mega projects, poor revenue collection, slowdown economic activities, and the government’s rising pandemic-related spending.

Experts suggested the government utilize the funds properly borrowed from foreign sources.

Of the total foreign loans, the government borrowed $59.35 billion and the private sector $18.68 billion, according to the data in FY21.

The public sector foreign debts rose $7.70 billion and private sector foreign debts $4.60 billion in the fiscal year.

The public sector foreign debt has increased due to the financial support by the foreign multinational lenders and donor agencies amid the pandemic, according to a BB official.

Foreign debt in the private sector rose basically as the central banks rescheduled loans for the pandemic-affected businesses, he said.

However, the country’s foreign debt was still very low compared to neighbouring countries such as India.

The country’s foreign debts stood at $65.73 billion in FY20, $60.35 billion in FY19, $54.73 billion in FY18, $45.23 billion in FY17, and $40.80 billion in FY16, the BB data showed.