Warning: file_exists(): open_basedir restriction in effect. File(/www/wwwroot/daily_new_nation/wp-content/db.php) is not within the allowed path(s): (/www/wwwroot/daily_new_nation/:/tmp/) in /www/wwwroot/daily_new_nation/wp-includes/load.php on line 711
Foreign debt pressure intensifies as loans dwindle - The New Nation
Skip to content

Saturday | January 31, 2026 | Dhaka

Foreign debt pressure intensifies as loans dwindle

Staff Reporter :

Foreign loan commitments and disbursements to Bangladesh have plummeted in the first seven months (July-January) of the current fiscal year 2024-25, while repayments of foreign loans have seen a significant rise.
According to the latest data from the Economic Relations Division (ERD), commitments from multilateral and bilateral lenders amounted to $2.35 billion from July to January, a sharp decline from $7.17 billion in the same period of the previous fiscal year.
Correspondingly, in the first seven months, foreign loan disbursements totalled $3.94 billion, down from $4.40 billion in the same period last year-a decline of $460 million or 10.45 percent.
However, the country repaid $2.42 billion by January of FY25, comprising $1.55 billion in principal repayments and $870 million in interest payments. This marks a 30 percent increase from the $1.86 billion
repaid during the same period of the last fiscal year.
The Asian Development Bank (ADB) committed the highest amount, pledging $700 million during this period, while the International Development Association (IDA), a wing of the World Bank, also made a significant commitment of $944.5 million.
However, some key lenders, including India, China, and Russia, have not made any new commitments during this period. Nevertheless, their disbursement figures remain significant, with Russia disbursing $536.87 million, China $267.81 million, and India $80.14 million.
Analysts argue that sluggish project implementation has contributed to the decline in new foreign loan commitments. However, if the government successfully finalises its ongoing reform initiatives, foreign development partners may resume their financial support.
The previous administration took substantial foreign loans for mega projects, many of which have been completed, while several remain under construction. With repayments for these projects already underway, the country has been grappling with mounting foreign loan repayment pressures over the past two years, straining both foreign exchange reserves and overall financial stability. The interim government is also facing the burden of outstanding debts and arrears.
Meanwhile, the projected foreign loan component in the revised budget of FY25 is set at Tk81,000 crore. However, given the declining trend in foreign loan inflows, it remains uncertain whether this target will be met.