Foreign loan inflows fall 29% as ADP hits five-year low

Bangladesh received reduced foreign loans in the first half of the current fiscal year as the execution of foreign-funded projects under the Annual Development Programme (ADP) fell to the lowest level in at least five years.

The nation received $2.49 billion in funds from international financial institutions, namely the World Bank and the Asian Development Bank, and bilateral lenders, including Russia, China, Japan and India, as well as other financiers, during the July–December period of fiscal year (FY) 2025–26.

The amount of fund releases dipped 29 percent year on year, according to data published by the finance ministry’s Economic Relations Division (ERD).

During the same period, implementation of foreign-funded projects under the ADP stood at 18.58 percent, down from 19.61 percent in the July–December period of FY25, according to data from the Implementation Monitoring and Evaluation Division under the planning ministry.

Expenditure on projects tied to foreign loans also dropped drastically in absolute terms amid political uncertainty.

The Centre for Policy Dialogue (CPD) earlier this month suggested giving top priority to the implementation of all foreign-funded ADP projects, given the current foreign exchange reserve situation.

ERD data showed that commitments of financing from international and bilateral lenders dipped as lenders are waiting for the political transition of the country, which is scheduled to hold a national election on February 12 this year.

ERD said funding promises fell 13 percent year on year to $1.99 billion during July–December of FY26. Of the amount, the ADB pledged to provide $1.26 billion.

Despite the decline in both commitments and disbursements, pressure to repay foreign loans increased.

Bangladesh paid 11 percent more year on year, amounting to $21.9 billion, to service its debt during the July–December period of FY26.