The government debt repayment to creditors in the first 11 months of the outgoing FY24 surged to $3.06 billion while the disbursement of loan from foreign sources has almost remained static during the same period.

The overall foreign loan repayment made a 25 per cent surge to $3.06 billion between July and May of FY24 from $2.4 billion during the same period of FY23, according to the monthly update of the Economics Relation Division.

The loan disbursement by the foreign creditors was recorded at $7.02 billion for the July–may period of FY24, compared with $6.9 billion during the same period of FY23.

The ERD update released on Thursday also showed that foreign creditors disbursed over $900 million less than their commitment of $7.92 billion for the period.

The ERD officials said that less than the expected disbursement against the significant increase in loan repayment put pressure on fiscal management amid the shortage of dollars

They apprehended that the trend of growing repayment against the less than expected disbursement might continue in the FY25 beginning from Monday.

They attributed the increasing pressure on the government mainly to two factors—the growing maturity of big size foreign loans and the high interest rate by the US central bank that has rendered borrowing by the developing countries costlier than before.

As a result, interest payment against foreign loans will continue to swell in the new financial year, raising concerns about its growing impact on debt management.

The government has projected that Tk 20,000 crore will be required to clear interest payments in the FY25, compared with the projection of Tk 14,600 crore made for the same fiscal one year ago amid economic headwinds.

The projections available in the ‘Medium-term macroeconomic policy statement for 2024–25 to 2026–27’ also mentioned that external debt was having an increasingly significant impact on the budget.