Foreign loan inflow plunges 61% in Jul-Aug

Bangladesh received only roughly $295 million in foreign loans from bilateral and multilateral financiers during July-August of the current fiscal year, down 61 percent from the amount received in the same period last year, according to provisional data released by the Economic Relations Division (ERD) yesterday.

A sharp decline in disbursements by the World Bank (WB) and European lenders led to the drop in foreign loan inflows to Bangladesh, a least developed country that meets part of its financing needs through foreign sources.

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During July-August of fiscal year 2026-27, the WB disbursed $74 million in loans, less than one-third of the $253 million it provided during the same period a year earlier.

Financing from European lenders to the government fell to $21 million during the period, from $348 million in the same period a year earlier.

This was the second month in which foreign financing inflows fell. In July of this fiscal year, foreign loan disbursements fell by 13 percent year-on-year to $180 million.

During July-August, commitments from international lenders also declined, continuing the previous trend.

At the same time, the pressure of loan repayments increased.

The government repaid nearly $700 million during July-August of fiscal year 2026-27, 5 percent more than a year earlier, according to the ERD.

ERD data showed that Bangladesh received $8 billion in foreign financing during FY2025-26, down from $8.57 billion in the previous fiscal year. The South Asian nation repaid $4.49 billion during the same year, nearly 11 percent more than a year earlier.