Bangladesh is experiencing a simultaneous decline in foreign aid commitments and loan inflows, alongside rising debt repayment obligations, during the first 11 months (July 2025–May 2026) of the current fiscal year, according to provisional data from the Economic Relations Division (ERD).
Total foreign aid commitments fell sharply to about $422 crore, down from $548 crore in the same period of the previous fiscal year, marking a decline of nearly 23 per cent. The fall was mainly driven by reduced project aid commitments, particularly in grants. Project assistance accounted for the vast majority of commitments, while food assistance remained negligible in both fiscal years.
In terms of actual fund release, total foreign aid disbursement stood at around $457 crore, compared to $560 crore a year earlier, indicating a significant slowdown in the inflow of external financing. Project aid continued to dominate disbursements, while grants contributed a smaller portion.
A separate ERD breakdown of foreign loans shows a similar trend. Loan disbursement reached $458 crore, down from $561 crore in the same period last year. New loan commitments also declined to $423 crore, compared to $549 crore previously.
Among development partners, the Asian Development Bank (ADB) accounted for the largest share of new commitments at $269 crore, while the World Bank’s (IDA) commitments fell sharply to just $42 crore, down from $234 crore a year earlier. No new commitments were recorded from several partners, including the United States and Japan during the reporting period.
Despite weaker inflows, debt servicing costs continued to rise. Bangladesh repaid around $413 crore in principal and interest combined, up from $378 crore last year. Of this, $268 crore was principal repayment and $144 crore was interest payment, reflecting increasing pressure from maturing external loans.
As a result, net foreign inflow has narrowed significantly, as a large portion of incoming funds is being used to repay existing obligations.
