Debt servicing surpasses foreign aid commitments

Bangladesh's debt servicing has exceeded foreign aid commitments in the first four months of the current fiscal year, as both interest and principal repayments on external loans have risen, according to official data.

Economic Relations Division (ERD) figures show that the government repaid US$1.58 billion during July-October of FY26 against outstanding foreign debts. In contrast, development partners committed $1.21 billion in fresh external assistance during the same period of FY26.

Meanwhile, aid disbursements increased, with development partners releasing $1.66 billion in the four months -- $462.91 million higher than the corresponding period of FY25. Of the total disbursements, $1.55 billion came as loans and $111.71 million as grants.

The $1.21 billion in new commitments comprised $1.12 billion in loans and $89.32 million in grants, the ERD data showed.

Of the $1.58 billion in repayments, the government paid $1.02 billion as principal and $560.87 million as interest.

A senior ERD official said disbursements picked up in October as project implementation accelerated in recent weeks. "We hope to achieve the annual foreign aid disbursement target by the end of the fiscal year," the official noted.

Among key development partners, the World Bank disbursed the highest amount -- $405.24 million -- during July-October. Russia followed with $407.78 million, the Asian Development Bank with $248.81 million, China with $194.01 million and Japan with $80.09 million.

The government has set a foreign aid disbursement target of $9.22 billion for FY26.

In FY25, development partners released $8.57 billion, ERD data showed.