Foreign aid commitments to Bangladesh declined by nearly 23 percent during the first 11 months of fiscal year 2025–26, while repayments on external debt continued to rise, reflecting the country's growing foreign debt obligations, according to officials and recent government data.
Preliminary figures from the Economic Relations Division (ERD) show that foreign aid commitments totaled US$4.22 billion during the July–May period of FY2025–26, down from US$5.48 billion in the same period of the previous fiscal year. This represents a year-on-year decline of approximately 23 percent.
According to the latest ERD data, the overall decrease in foreign assistance was largely driven by a reduction in commitments for project aid. During the period under review, commitments under project assistance included US$4.06 billion in loans and US$158.8 million in grants. In the corresponding period of the previous fiscal year, project aid commitments amounted to US$5.108 billion in loans and US$381 million in grants.
Despite the decline in new commitments, the disbursement of foreign assistance remained substantial. Between July and May of FY2025–26, total foreign aid disbursements reached US$4.57 billion, compared with US$5.60 billion during the same period a year earlier.
Of the total disbursed amount, US$4.53 billion was provided as project assistance, including US$4.14 billion in loans and US$393.8 million in grants. Food aid disbursements totaled US$40 million, slightly higher than the US$35 million recorded during the corresponding period of the previous fiscal year.
Meanwhile, Bangladesh’s external debt servicing burden continued to increase. During the July–May period of FY2025–26, the country paid US$4.13 billion in principal and interest on foreign loans, up from US$3.78 billion in the same period of FY2024–25.
Of the total debt service payments, US$2.68 billion was principal repayment and US$1.44 billion was interest. In local currency terms, external debt servicing amounted to Tk 50,515.86 crore, compared with Tk 45,676.08 crore during the same period a year earlier.
Officials and analysts said repayment obligations are increasing as several large infrastructure and development projects financed through foreign loans have entered their repayment phase. They cautioned that the pressure of external debt servicing is likely to intensify further in the coming years.
Bd-pratidin English/ ANI
