Seven leading development partners refrained from making any loan commitments to Bangladesh in the first quarter (Q1) of the 2024-25 fiscal year, reportedly due to political unrest during the July-August period, officials from the Economic Relations Division (ERD) confirmed.

“No loan agreements were signed between July and September,” an ERD senior official stated. However, other development partners, traditionally contributing smaller sums in foreign assistance, committed to a total of $27.41 million in grants.

The seven main development partners—the World Bank, Asian Development Bank (ADB), Japan, Asian Infrastructure Investment Bank (AIIB), China, Russia, and India—had previously pledged $2.88 billion in loans during the same period of FY2024.

The official noted that the current slowdown in commitments was influenced by delayed missions and suspended activities due to July-August political unrest.

Signs of renewed engagement are emerging as development partners resume discussions with government bodies. Substantial agreements for various projects are likely within the current quarter (October-December).

Bangladesh experienced a sharp decline in aid disbursements in Q1, receiving only $846.12 million—a $435.6 million reduction from the $1.28 billion disbursed in the same quarter of FY2024. Debt servicing costs, however, surged, with $1.12 billion paid in Q1 against mid- to long-term loans, compared to $870.46 million in Q1 last fiscal year.

ERD officials remain optimistic, expecting a surge in aid commitments during the second half (January-June) of FY2025, potentially reversing this first-quarter trend.