Aid disbursements dip 17.43pcForeign debt servicing jumps 52pc in July-Oct

Country's foreign debt repayment in the first four months of the current fiscal year (FY 2023-24) stood at US$1.10 billion, nearly 52 per cent higher than the amount paid against the concessional loans in the same period of the last FY.

The repayment in principal and interest to the development partners against medium- to long-term (MLTs) loans was $724.28 million during July-October period of FY 2022-23, official data showed.

Meanwhile, the foreign loan disbursements by the development partners dipped by $344.44 million or 17.43 percent to $1.63 billion during the four-month period of FY 2023-24, showed Economic Relations Division (ERD) provisional data on Tuesday.

According to an analysis, the interest payments jumped by 2.5 times to $467.42 million during the period from only $187.73 million in the same period of previous FY.

A senior ERD official said the repayments suddenly jumped in the recent months as the government borrowed a huge amount of external loans over the last one decade.

"The repayment against many big foreign loans started as their respective grace periods are over," he added.

Meanwhile, the foreign aid commitment by the overseas development partners (DPs) swelled to $3.63 billion during July-October period of the current FY2024.

In the same period of FY2023, Bangladesh got confirmation of $413.81 million in loans and grants, the ERD data showed.

The DPs including the World Bank, Asian Development Bank, and Japan provide loans and grants to help improve Bangladesh's infrastructure and social services.

Another ERD official said that most of the loans over the last one decade were taken on harder terms and conditions with shorter repayment period while the interest rates were higher than the previous decades.

Besides, the government implemented scores of foreign aid-supported mega projects over the last few years, significantly raising the total outstanding loans, he added.

According to the ERD data, the government during Jul-Oct period of the current FY2024 repaid $634.08 million in principal and $467.42 million in interests, making a total debt servicing of $1.01 billion.

In the same period of FY2023, the government repaid $536.55 million in principal and $178.73 million in interest out of the total $724.28 million debt servicing.

Out of the $1.63 billion foreign aid disbursement during Jul-Oct period of the current FY2024, the DPs released $1.56 billion in loans and $65.37 million in grants.

The DPs also confirmed $3.38 billion worth of loans and $243.20 million grants during the first four months of the current FY.