Foreign aid flow may fall short of target

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The budget deficit in the current fiscal is likely to go up further as the foreign aid flow might fall short of target due to lower disbursement by the donors, officials said Wednesday.

"The government received US $1.36 billion worth of foreign assistance in the first 10 months (July-April) of the current fiscal against the target of $2.2 billion in the current year's revised budget," an economic relations division (ERD) official told the FE.

Foreign donors, however, made commitments of over $2.63 billion for the outgoing fiscal.

The government has revised its budget deficit and set it at 4.8 per cent of the gross domestic product (GDP) from the earlier projection of 4.2 per cent of the GDP.

"We need $833 million more aid in the last two months (May-June) of the current fiscal to achieve the external resources target according to the revised budget. It will be difficult for the country to secure such funds in only two months," the official said requesting anonymity.

When asked, ERD secretary Aminul Islam Bhuiyan said: "The target of $2.2 billion foreign aid in the current fiscal might not be achieved. But I am hopeful that the government will receive over $2.0 billion worth of assistance by end-June this year."

"As the World Bank has disbursed $320 million budgetary support credit a few days ago, the foreign aid will stand at around $2.0 billion at the end of the current fiscal," the secretary said.

The ERD official said the aid flow to the country until February last was satisfactory, but it started declining since then.