Aid disbursements during Jul-Feb decline 26.2pc

Bangladesh is facing a tight fiscal landscape as foreign-aid disbursements saw a significant year-on-year decline while debt- repayment obligations continued to swell during the July-February period of the current fiscal year, officials say.
The latest provisional data from the Economics Relations Division (ERD) reveals the external development partners disbursed $3.05 billion worth of assistance in the said period, marking a 26.2 per cent drop from the $4.13 billion during the same period in FY25.
On the other hand, while aid inflows slowed, the cost of servicing the existing foreign debt rose.
Debt repayments climbed to $2.90 billion in the first eight months of FY26, 10.36 per cent higher than $2.64 billion for medium- to long-term loan (MLT) to outstanding in the same period a year ago, the ERD data shows.
The increase is even more pronounced when viewed in local currency due to exchange rate fluctuations.
Total debt servicing in the local currency jumped from Tk 316.594 billion in FY25 to Tk 353.938 billion in the current fiscal year, placing additional pressure on the national exchequer.
Meanwhile, foreign aid commitments for the said period stood at $2.43 billion, slightly higher than the $2.35 billion during the July-February window of FY25.
Project assistance continues to be the primary driver of foreign aid, though it saw a contraction in both commitment and disbursement phases.
Notably, food assistance remained a minor component, with only $25 million in grants disbursed during this period, mirroring the figures from the previous fiscal year.
The government repaid $1.944 billion in principal amount for the outstanding and $955.84 million in interest during the first eight months of FY26.
In the same period last year, the government repaid $1.692 billion in principal and $944.08 million in interest.