Foreign loan disbursement to Bangladesh plunges 18% in nine months

Bangladesh sees slower foreign funding as loan repayments continue to rise

Foreign loan disbursement to Bangladesh has fallen by nearly 18 percent in the first nine months of the 2025-26 fiscal year compared with the same period a year earlier, amid prolonged political and economic instability.

Development partners and international lending agencies disbursed $3.89 billion in loans and grants between July and March of the ongoing fiscal year, down from $4.81 billion during the corresponding period of the previous fiscal year.

The information was disclosed in the latest report published by the Economic Relations Division (ERD) on Thursday.

During the same period, Bangladesh repaid $3.53 billion in principal and interest on previous foreign loans, compared with $3.21 billion a year earlier.

Economists, analysts and ERD officials believe foreign loan disbursement has slowed because development activities have failed to regain momentum over the past one and a half years following the political instability that began after the Awami League government was ousted during the 2024 movement.

The latest ERD data also showed a decline in foreign aid commitments during the first nine months of the ongoing fiscal year.

Bangladesh secured commitments worth $2.80 billion during the period, down from $3 billion in the same period of the previous fiscal year.

The amount of foreign loan commitments has therefore declined by more than 6 percent year-on-year.