Bangladesh’s foreign project aid disbursement dropped sharply by more than 60 percent year-on-year to $294.56 million in the first two months of the current fiscal year, according to provisional data from the Economic Relations Division (ERD).

According to the ERD’s Foreign Assistance Monthly Report for FY2026-27, Bangladesh received $294.56 million in project assistance disbursement during July-August, down from $750.07 million in the corresponding period of FY2025-26.

The latest disbursement comprised $291.37 million in loans and $3.19 million in grants, compared with $746.16 million in loans and $3.91 million in grants a year earlier.

Among the major development partners, the Asian Development Bank disbursed $128.72 million during the two-month period, followed by the International Development Association (IDA) with $73.96 million.

Japan disbursed $39.04 million, while India provided $30.30 million and Russia $20.65 million. Other development partners accounted for $1.89 million.

Meanwhile, foreign assistance commitments during the period stood at $240.39 million, slightly lower than $243.81 million in July-August of the previous fiscal year.

The latest commitments consisted of $143.28 million in loans and $97.11 million in grants. A major portion of the commitment, $236.88 million, came from development partners categorised Other than ADB, IDA, AIIB, India, China, and Russia, while Japan committed $3.51 million.

Besides, external debt servicing rose by nearly 4.8 percent year-on-year, with the country paying $698.92 million during July-August 2026.

The amount was $667.11 million in the corresponding period of FY2025-26, showing an increase of $31.81 million.

Of the total debt servicing in July-August, Bangladesh paid $516.04 million in principal and $182.88 million in interest.

In the same period last fiscal year, principal repayment stood at $488.79 million and interest payment at $178.32 million.

In taka terms, the total debt servicing increased to Tk 8,626.25 crore in July-August from Tk 8,130.87 crore in the same period of FY2025-26, an increase of Tk495.38 crore.

Principal repayment rose to Tk 6,368.85 crore from Tk5,957.50 crore, while interest payments increased to Tk2,257.40 crore from Tk2,173.37 crore.

The higher debt-servicing requirement came at a time when the flow of foreign project assistance declined significantly.

The figures cover the July-August period of FY2026-27 and are provisional, according to the ERD’s Foreign Aid Budget and Accounts (FABA) wing.