Foreign aid received by Bangladesh from development partners has dropped by US$56 million in the first quarter of the current fiscal year (FY) 2019-20 compared to that of the same period in the previous fiscal, officials said on Tuesday.
The Economic Relations Division's provisional data showed that multilateral and bilateral development partners (DPs) disbursed $940.80 million worth of concessional assistance during the July-September period of FY 2019-20.
The DPs provided $996.85 million worth of assistance during the same period of FY'19, the official statistics showed. Out of $940.80 million foreign aid disbursed during Q1 of this fiscal, $935.23 million came as loan while $5.57 million as grant.
Meanwhile, aid commitment from DPs including the World Bank, the Asian Development Bank, the Japan International Cooperation Agency, China and India increased by $193 million to $2.01 billion in the Q1 of the current fiscal, the data showed.
During the same period in FY'19, they confirmed $1.82 billion worth of foreign assistance through signing several aid agreements with the government.
Out of the $2.01 billion aid commitment in the Q1 of this fiscal, the DPs confirmed $1.99 billion worth of loan while the remaining $25 million as grant.
An ERD official said: "Although disbursement has been showing a downward trend in the first quarter, it will pick up in the near future as commitment was better during the period under review."
During the July-September period of the current FY, the government serviced debts worth $495.18 million as the government's short-term hard loan borrowing increased over the past few years, ERD officials said.
According to the ERD, the government in the Q1 of FY2019 repaid US$443.37 million in interest and principal against medium-and long-term outstanding external loans.
Since our borrowing has increased over the years, debt servicing is also growing, said a senior ERD official.
"The government took a substantial amount of buyers' credit and short-term loans over the last few years. Grace period of most of the loans was 5-6 years. So, the government has to start servicing that debt," he said preferring anonymity.
Development partners including WB, ADB, JICA, UKAID and Islamic Development Bank disburse concessional assistance every year for the development of Bangladesh.
The government has set an ambitious target of receiving US$6.0 billion in concessional foreign assistance and commitment of $8.47 billion during the current FY.