Thursday, 18 August, 2022

Record $10bn overseas funds received in FY2022

  • Staff Correspondent
  • 29 July, 2022 12:00 AM
  • Print news

Bangladesh received over $10 billion as loans and grants from the development partners during the fiscal year 2021-22, the highest in the country’s history.

The amount is a 26 percent increase from the loans and grants the country received a year earlier, suggests Economic Relations Division (ERD) data.

The figure grew by over $7.95 billion from the previous fiscal year.

ERD officials said the increased fund inflows to some megaprojects close to finishing line and the higher budget supports from the development partners as Covid-19 emergencies were the key behind the record foreign fund release.

The performance was even $1.79 billion higher than the ERD’s revised target of $8.2 billion.

ERD data showed that the Asian Development Bank (ADB)released the highest amount offund among the development partners during the period, followed by Japan and the World Bank.

“Foreign funded projects’ work gained momentum immediately after the impacts of Covid-19 pandemichad waned. Thischange contributed to the record $10 billion foreign fund release,” Economic Relations Secretary Sharifa Khan said. 

ERD officials informed that a sizeable amount of last year’s foreign funds was for supporting the national budget as Bangladesh had agreements with the World Bank and ADB to keep the country’s economy stable during the Covid-19 crisis.

Finances from these two organisations accumulated huge foreign funding at the end of the year, they said.

In the last fiscal year, ADB released $2.56 billion, Japan $2.2 billion and the World Bank $1.66 billion

Russia, on the other hand, disbursed $1.22 billion in a single year for the construction of the Rooppur Nuclear Power Plant Project, while the Chinese government released $1 billion for different projects being implemented with its funds.

India provided $324.1 million, the seventh-highest during the fiscal year, while other agencies and countries funded $709.1 million combined.

Meanwhile, Bangladesh managed to pay back $2.01 billion in dues during the last financial year, which was almost $100 million more than the previous year.

As the grace periods of external loans for various development projectshave ended, the repayment pressure of principal amounts is growing.

But the commitments for new funds from the development partners in FY2021-22 dropped by 13 percent to $8.2 billion from $9.4 billion in the previous fiscal year, according to the ERD report.

The World Bank, ADB and Japanhave made commitments of over $1.5 billion each, while China has pledged to provide Bangladesh over $1 billion.

Now, foreign aid in the pipeline stood at $48.5 billion after the end of FY2021-22, which was $50.34 billion at the start of the fiscal year.

Hailing the increased budget support, the economic analysts said that availability of such low-interest loans has somewhat taken the pressure off bank borrowing, which is costlier than foreign loans. 

They also suggest that the government has to adopt more strategies to increase flexible external loans as many foreign-funded projects are nearing the finishing line and the government’s debt repayment pressure will go up in next few years.

They also advised to accelerate project implementation to increase disbursements of foreign aid now stuck in the pipeline apart from trying to enhance exports and remittances to reduce dependence on foreign debts in the future.