Aid outlook weakens in FY26 It falls over $1b

Bangladesh’s foreign aid landscape recorded a noticeable contraction during the first eleven months of the current fiscal year (FY2025–26), with both foreign aid commitments and disbursements declining, even as debt-servicing obligations continued to rise.

According to a report released on Monday (23 June) by the Economic Relations Division (ERD), total foreign aid disbursements fell by more than $1 billion compared to the same period of the previous fiscal year.

At the same time, the country’s total debt-servicing payments crossed $4 billion, the report added, underscoring growing pressure on external financial management.

The ERD report shows that cumulative foreign aid commitments during July 2025 to May 2026 stood at $4.23 billion, marking a significant decrease from $5.49 billion recorded in the corresponding 11-month period of FY2024–25.
Actual inflows of foreign assistance also followed a downward trend.

The report stated: “Total foreign assistance disbursements fell to $4.58 billion in FY2025–26 from $5.61 billion in the same period of the previous fiscal year, representing a decline of more than $1 billion in overall resource inflows.”

Earlier, an ERD update released on 24 May indicated that development partners disbursed $4.236 billion during the July–April period of the fiscal year, further reflecting the ongoing slowdown in external assistance flows.

Officials and analysts note that the simultaneous fall in aid inflows and rise in debt servicing could place additional strain on the country’s external balance position if the trend continues.