Foreign loan inflows fall, repayments rise
Foreign loan inflows to Bangladesh fell while repayments increased during the first nine months (July–March) of the current fiscal year, reflecting slower project implementation and ongoing policy adjustments.
A report released on Thursday by the Economic Relations Division (ERD) attributed the decline largely to sluggish execution of development projects during and after the election period.
According to the report, loan disbursements from development partners dropped by 19 percent year-on-year, while new commitments declined by 6.69 percent.
In contrast, repayments rose by 9.74 percent over the same period.
ERD officials said development activities slowed significantly ahead of the elections, and although the new government has assumed office, project implementation has yet to fully regain momentum.
They added that several ongoing projects are currently under review, which has delayed the release of foreign funds.
Data from the ERD shows that loan disbursements stood at $3.891 billion during July–March, down from $4.808 billion in the corresponding period of the previous fiscal year.
Commitments also declined to $2.804 billion, compared to $3.005 billion a year earlier.
Officials noted that the government is now prioritising energy security in the face of global uncertainties, particularly amid fuel market pressures linked to tensions involving Israel, the United States, and Iran.
They also said the new administration has reassessed a number of proposed projects, leading to a temporary slowdown in signing new agreements with development partners and a dip in fresh commitments.
To address ongoing economic and energy challenges, the government has initiated efforts to secure around $3.2 billion in budget support.
However, ERD officials expressed optimism that foreign loan commitments may pick up in the remaining months of the fiscal year.
Meanwhile, the rise in loan repayments is largely due to the expiration of grace periods for several previously contracted loans.
During the July–March period, Bangladesh repaid $3.525 billion in principal and interest, up from $3.212 billion in the same period last year.
