Aid inflows lag behind FY goals

Foreign aid disbursement and fresh commitments to Bangladesh remained significantly below fiscal year targets during the current financial year, while the country’s external debt repayment burden continued to rise, according to a report released by the Economic Relations Division (ERD) on Saturday.

Against a full-year foreign aid disbursement target of $7.868 billion, Bangladesh received only $4.236 billion during the July-April period, achieving 53.84 per cent of the annual target.

The latest figure also represents a sharp year-on-year decline.

During the same ten-month period of the previous fiscal year, development
partners had disbursed $5.163 billion, indicating that aid disbursement has fallen by around 18 per cent.

Foreign aid commitments have also remained below expectations. The government had set a target of securing $6.715 billion in fresh commitments from development partners during the current fiscal year.

However, by April, Bangladesh had managed to secure commitments amounting to only $2.807 billion, representing 41.84 per cent of the target.

In comparison, aid commitments during the July-April period of the previous fiscal year stood at $4.259 billion, reflecting a year-on-year decline of nearly 34 per cent.

Despite the slowdown in aid inflows and fresh commitments, Bangladesh’s external debt repayment obligations continued to increase steadily.

During the first ten months of the previous fiscal year, the country repaid $3.507 billion to development partners.

In the corresponding period of the current fiscal year, debt repayments rose to $3.802 billion.

As a result, foreign debt servicing increased by 8.41 per cent compared with the same period of the previous year.