STAR BUSINESS REPORT

The inflow of net foreign loans fell by three-fourths during the July-May period of fiscal year 2025-26 compared to the same period last year, as Bangladesh repaid more to international creditors than it received.

According to data released by the Economic Relations Division yesterday, the country received $4.57 billion in foreign loans disbursed by lenders such as Russia, the World Bank and the Asian Development Bank (ADB) during this period, down 18 percent year on year from $5.6 billion a year earlier.

The decline was mainly due to a fall in the flow of project assistance.

On the other hand, debt-servicing costs edged up 9 percent year on year to $4.13 billion in the July-May period of fiscal year 2025-26 from $3.78 billion a year earlier.

As such, the net inflow of finance from foreign sources stood at $445 million in the first 11 months of the current fiscal year, one-fourth of the $1.82 billion recorded in the same period a year earlier.

Commitments from foreign lenders regarding financing to Bangladesh also dropped significantly during this period, to $4.22 billion from $5.45 billion a year earlier.

Since 1972-73, foreign lenders have pledged to provide nearly $200 billion in financing to Bangladesh.

At the end of June last year, total disbursements of loans and grants stood at $142 billion, with loan repayment pressure building amid increased borrowing and rising interest rates.

Over the past decade, loan repayment has grown four-fold to $4.08 billion in fiscal year 2024-25 from $1.09 billion in 2014-15, according to finance ministry data.