Foreign loan flow drops by 25pc in 4 months26 November 2022
Staff Reporter :
Bangladesh received $1.97 billion from various donor countries and organisations in first four months of the current fiscal year (2022-23), which is 25 per cent less than the corresponding period of last year.
Development partners disbursed $2.62 billion in loans and grants in first four months (July-October) of the last fiscal year, according to the latest data of the Economic Relations Department (ERD).
Economists said increase in low-interest external loans and aids were must needed for the country to deal with the ongoing economic crisis.
But, it did not happen. Rather, it is declining, which is making the government difficult to face the economic shocks caused by the ongoing Russia-Ukraine war, they said.
They further said like many other countries in the world, Bangladesh's economy is under pressure, owing to high energy, food and commodity prices, and shrinking foreign exchange reserves, which already declined to $34 billion.
The country received the highest $10 billion foreign loans in the last fiscal year (2021-22), which was 26 per cent higher than the previous year. The loans had contributed heavily to tackle the economic shocks caused the Covid-19 pandemic in last two years.
The ERD data showed that the country got around $0.49 billion loan assistance in July, the first month of the current fiscal year, which was 48.50 per cent higher than the same month of previous year.
But, it started to decrease from August and the country received around $0.37 billion in that month, which is 23 per cent less than the previous month.
The country received $0.48 billion and $0.62 billion foreign assistances in September and October respectively, according to the ERD data.
Dr Atiur Rahman, former governor of Bangladesh Bank, said, "Our foreign currency reserves are under pressure. The loans from different donor agencies like World Bank, Asian Development Bank and JICA were needed to deal with the pressure."
"Steps should be taken to bring the loans which are in the pipeline of these agencies immediately. IMF has already agreed to disburse loans. So, other agencies will also come forward in this regard," he hoped.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI),
told The New Nation, "Like other countries of world, Bangladesh's economy is under pressure. More and more low-interest foreign loans were urgently needed to meet this pressure. But, it is decreasing."
"Besides, export earnings and remittance inflows are also in down trend due to Russia-Ukraine war. All the factors are making difficult to face the pressure," he said.
He, however, said that the crisis might be gone, if the IMF disburses the first installment from its agreed loans in February next year.