The plan comes as $42.85b foreign funds remained unused at start of current FY

The government has planned to increase foreign financing by around 15 percent and reduce bank borrowing by 28 percent in the revised budget for this fiscal year to tame inflation.

Although foreign aid commitments made by global lenders to Bangladesh surged more than 600 percent in July-September of the current fiscal year, the disbursement declined. 

Utilisation of foreign assistance under the government’s Annual Development Programme (ADP) by ministries and divisions has slightly declined year-on-year in the first two months of fiscal year 2023-24. 

Attempting to tackle poverty and climate change simultaneously could lead some governments to make costly and counterproductive decisions.

Foreign assistance utilisation by the government has gone up by 1.57 per cent year-on-year during the first two months of the current fiscal year, thanks to improvements in the use of project aid. 

The use of foreign aid for development projects in Bangladesh jumped 49 per cent year-on-year in July, providing some relief to the government amid the ongoing pressure on the country’s foreign exchange reserves.

Bangladesh’s use of foreign assistance reached a new record high of $10 billion in fiscal year 2021-22, primarily behind vaccinations, one-time budget support, economic recovery from the pandemic and implementation of mega projects.

Foreign aid in the pipeline surged to a record $48.11 billion at the end of the last fiscal year and Bangladesh, despite spending more of the committed money, keeps on failing to reach its targets of utilisation.

The government is set to fix the size of the development budget at Tk 202,721 crore for 2019-20, up 21.39 percent from the current fiscal year, as it looks to mobilise a higher amount of foreign aid piled up in the pipeline.