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Foreign Loan Commitments Plummet 98% to $20M in FY25
Bangladesh's foreign aid commitments saw a staggering 98% drop in the first two months of fiscal year 2024-25 (FY25), totaling just $20.16 million compared to $1.14 billion during the same period last year, according to the Economic Relations Division (ERD).
This sharp decline coincided with political turmoil following the countrywide Anti-Discrimination Student Movement and the resignation of former Prime Minister Sheikh Hasina. The interim government's review of foreign loan-funded projects has halted new loan agreements, impacting overall commitments.
ERD officials expect loan agreements to resume once the project review is complete, aiming to meet foreign aid targets. Following the formation of the interim government, multilateral and bilateral partners, including the World Bank and Asian Development Bank, have expressed preliminary support for future projects.
The interim government is prioritizing foreign-funded projects by assessing ongoing, proposed, and under-negotiation initiatives. ERD has requested government agencies to submit a priority list, detailing project rationale and progress, by the end of the month.
Professor Wahiduddin Mahmud, Planning Advisor, emphasized the need for swift project selection to secure necessary funding, noting that while many projects await approval, not all are viable.
In contrast, the previous fiscal year (2023-24) saw Bangladesh secure $9.88 billion in foreign aid commitments, an increase of 8.92% from the year before.