Foreign loan commitments to Bangladesh surged by a remarkable 1,170%, surpassing $5.85 billion in July-November FY 2023-24, indicating development partners’ confidence in supporting the country. Despite this surge, foreign loan disbursements declined by 14%, reaching approximately $2.12 billion, creating pressure on diminishing foreign exchange reserves.
Debt servicing surged by 51%, reaching $1.33 billion during the same period. The efficient groundwork by the Economic Relations Division led to increased loan approvals, contrasting with the previous year’s slow progress. However, challenges in project implementation and the mismatch between stringent conditions and government agencies’ capacity contribute to sluggish disbursements. Rising interest rates and the end of loan repayment holidays further intensify debt servicing burdens.
Notable commitments came from ADB, Japan, and the World Bank, with Japan leading in actual disbursements. The nation aims for $10.2 billion in pledges for FY24, with 57.3% realized in the first five months. The market analyst emphasizes the need for effective fund deployment to ensure development.
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