Bangladesh spent US$ 3 billion in debt repayment in the 11th month of the current financial year due to the impact of ‘real’ repayment of mega projects. Which is the all-time record.
According to the Economic Relations Department (ERD) update report released on Wednesday (June 26), Bangladesh has paid a total of $3.068 billion to its various development partners during the 11 months of the current fiscal year, i.e. between July 2023 and May 2024.
Bangladesh paid $2.467 billion in interest and principal during the same period last fiscal year, which reached $2.67 billion at the end of the full fiscal year.
Officials of ERD said that the actual repayment pressure of foreign debt has increased since the last financial year. Actual repayment amount will increase gradually in current financial year and next financial year.
According to ERD data, the government has paid $1.8 billion as of May in the current financial year as against $1.58 billion in the same period last fiscal.
On the other hand, Bangladesh has to pay high interest for market-based loans. The Secured Overnight Financing Rate (SOFR) has risen amid the Ukraine-Russia war. Currently SOFR is more than 5 percent which was less than 1 percent before Russia-Ukraine war situation. Again, the market-based debt of Bangladesh is also continuously increasing. Because of this, Bangladesh now has to pay more money in terms of interest.
In the 11 months till May of the current financial year, interest payments have increased by 42 percent. According to ERD data, the government paid $1.25 billion in interest during the current financial year as against $882.86 million in the same period last fiscal.
Meanwhile, during July-May of the current financial year, the commitment of development partners increased by 33 percent.
According to ERD data, the government has received commitments of $7.92 billion in the current financial year up to May, as against $5.974 billion in the same period last fiscal.
Among development partners, the Asian Development Bank (ADB) committed the most during the July-May period. The government has signed a contract worth $2.69 billion in 11 months with this company.
The government then received a pledge of $2.03 billion from Japan and $1.41 billion from the World Bank.
On the other hand, development aid agencies disbursed $7.02 billion during July-May of the fiscal year as against $6.98 billion in the same period last fiscal.
Japan has the largest monetary deficit in 11 months. 1.8 billion dollars have been deducted from this country. ADB disbursed $1.59 billion and the World Bank disbursed $1.4 billion.
MOS/MHR
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