Written by The Banking Post
Foreign loan disbursement rose sharply in the first quarter of the current fiscal year, showing a 35 percent jump compared with the same period last year, according to the Economic Relations Division (ERD).
Between July and September of FY2025–26, development partners released $1.15 billion, up from $846.1 million a year earlier, the ERD data showed.
The increase came even as the economy experienced a period of stagnation during the quota reform movement.
Loan repayments, however, outpaced disbursements. In the first three months of the fiscal year, the government paid back $1.28 billion — including $816.8 million in principal and $462.9 million in interest — marking a 13.5 percent rise from the same period last year.
Commitments for new foreign loans and grants dropped significantly, totaling $910.6 million, compared with just $27.4 million in the same period last year.
In FY2024–25, foreign loan disbursement stood at $8.57 billion, down from $10.28 billion in FY2023–24. Yet, repayments climbed to $4.08 billion, which included $2.59 billion in principal and $1.49 billion in interest, indicating growing debt-servicing pressure on the government.
