Staff Correspondent:

Loan disbursements and commitments from development partners have decreased during the first eight months of the current fiscal year, while government debt repayments have increased.

According to Economic Relations Division (ERD) data, fresh loan commitments fell by 67.3% between July and February, while disbursements declined by 17.3% and debt repayments increased by 29.9%.

The ERD report released today showed that commitments amounted to $2.35 billion, compared to $7.20 billion in the same period of the previous fiscal year.

Development partners disbursed $4.13 billion in July-February, compared to $4.99 billion a year ago.

On the other hand, Bangladesh repaid $2.636 billion to development partners, compared to $2.03 billion last fiscal year.

At the same time, actual repayment increased from $1.224 billion to $1.962 billion, and interest payments rose from $805.95 million to $944 million.

ERD officials said the interim government has decided to reduce foreign loans under the term loan strategy, leading to decreased commitments from development partners.

While development partners are willing to offer more loans than last fiscal year, the government is only taking loans for emergency budget support and key projects.

As a result, loan agreements are progressing more slowly, reducing loan commitments, they added.

ERD officials further said the government is taking fewer new loans to manage debt repayment pressure, which will increase as the grace period ends.

To alleviate this, the government has decided to reduce foreign loan intake, they added.

Additionally, the officials highlighted that while there is a focus on debt disbursement in the pipeline to ease repayment pressure, the current situation in the country has limited the benefits of these disbursements.