The government's foreign debt flows have increased to $621.40 million in October in the current fiscal year 2022-23 over the corresponding period of previous fiscal despite the global crisis.
Due to the crisis, the economy of Bangladesh, like many other countries in the world, is under a lot of stress along with the main indicators of the economy, foreign exchange reserves are also decreasing.
According to Bangladesh Bank data, the country’s reserves stood at $34.30 billion till November 17.
On August 24 last year, the reserves crossed the $48 billion milestone, surpassing all past records.
Meanwhile, Bangladesh received more than $10 billion foreign loans in the last fiscal year 2021-22, breaking all previous records, which was 26 percent more than the previous year.
The huge low-interest loans helped the economy after two years of the coronavirus pandemic.
However, in the first 4 months of the current fiscal year 2022-23, Bangladesh has received $1.97 billion from various donor countries and organizations, which was 25 percent less than the same period last year.
During the same period of the fiscal year 2021-22, donors had waived $2.62 billion, according to the Economic Relations Department (ERD) data.
In July of the new fiscal year, nearly $490 million in foreign debt came in, which was 48.50 percent more than last July.
However, in August this fiscal, lenders wrote off $376.30 million in debt, which was about 23 percent less than the previous month in July.
The next two months, September and October, however, increased slightly to stand at $484.90 million and $621.40 million.
According to ERD data, the government has paid $724.20 million for the principal and interest of the loan taken earlier during July-October.
During the same period of last year, $749.10 million were paid in interest-principal. As a result, the government has to spend 3.32 percent less money for interest-principal payment during the first four months in the current fiscal than the same period last year.
In July-October of the fiscal year 2022-23, Japan has given the highest amount of money, $58.69 million. $453.73 million received from China. Asian Development Bank (ADB) gave $240.77 million.
The World Bank has released $365.20 million and India gave $119.10 million.
Donors have pledged 276 crore 15 lakh 50 thousand dollars in loan assistance in these 4 months of 2021-22 financial year. July-October of this year has promised only 41 crore 50 lakh 38 thousand dollars. As it appears, in the first four months of the last financial year, more than 6 and a half times more commitments were received than in the same period of this year.
Meanwhile, Bangladesh’s total external debt increased by about $13 billion to cross $94.5 billion at the end of June 2022, compared to the previous year, indicating an increasing dependence on foreign loans for its development activities.
Prof Atiur Rahman, eminent economist and former governor of Bangladesh Bank, said, “Our reserves are under pressure. To handle this pressure, loans from various donor agencies including World Bank, ADB, JICA are needed. Steps should be taken to bring the loans which are in the pipeline of these organizations quickly.”
“The good news is that the government has been emboldened by the IMF agreeing to lend. Other organizations including the World Bank will now come forward. The government can easily deal with the crisis. I believe, from 2023, the government will show courage and turn around. The economy will also return to the previous state.”
Economists said Bangladesh's economy is constantly growing, besides, the ability to pay interest is also increasing.
At present the economy of Bangladesh is in a very strong position, they said, adding that as a result, the payment of foreign interest has increased several times.
