Bangladesh's foreign-debt service has surged significantly to an annualised rate of 45 per cent over the last few months, much of it on account of high interest payments, officials said.
The government had spent US$1.86 billion in the first 7 months (July-Jan) of the current fiscal (FY) 2023-24 for repayment to lenders, over half-a-billion-dollar higher than in the corresponding period of the last fiscal, they told the FE writer Monday.
An FE analysis has found Bangladesh's debt repayment having jumped significantly mainly due to a record-high amount of interest payments against the outstanding total loans.
Besides, the rise in medium- to long-term (MLT) loans and a higher borrowing trend of the government have already created further pressure on the country's falling foreign-exchange reserves, the analysis has found.
The government repaid $1.86 billion to different lenders during the July-January period of the current fiscal, some $571.99 million higher than that in the same period last fiscal, Economic Relations Division (ERD) provisional data showed Monday.
During the period in last FY2023, the government repaid $1.28 billion to the foreign lenders.
According to the ERD count, the government repaid the record-highest $760.74 million as interest against its outstanding foreign (MLT) loans during the past July-Jan period.
During the first seven months this fiscal, the interest payments alone accounted for 108 per cent higher than that in the same period last fiscal, the ERD data showed.
In the same period in FY2023, the government repaid only $365.87 million as interest for its total outstanding.
Besides, the government served a $1.096 billion worth of funds as the principal during the seven months of the current FY, $177.12 million higher than $918.91 million in the corresponding period of FY2023.
Meanwhile, both the foreign aid disbursement and commitments had increased during the July-Jan period this fiscal, the ERD statistics showed.
"Although the governmental austerity and tight monetary policy amid global and local economic crises had hit the foreign-assistance inflow hard till November this fiscal, the flow got boosted in the last couple of months, to a total of US$4.39 billion in January," said one official.
During July-Jan period last FY2023, the development partners released $4.26 billion worth of loans and grants, the officials said.
During the same time this fiscal, the overseas development partners made a $7.17 billion worth of aid commitments compared to only $1.76 billion in the same period last FY2023, ERD data showed.
The country's major development partners, including China, India, Russia and the Asian Infrastructure Investment Bank (AIIB), had not made any commitment of foreign aid during Jul-January period this fiscal.
Among the development partners, the Asian Development Bank (ADB) disbursed the highest amount of assistance during July-Dec period followed by Japan, the World Bank, Russia and China.
During the July-Jan period, the ADB released $1.24 billion, Japan $883.78 million, the WB $763.27 million, Russia $587.77 million and China $361.71 million, ERD statistics showed.
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