Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 285 Wed. March 16, 2005  
   
Business


Foreign aid disbursement rises by 170pc in 6 months
Current account balance still under pressure


Foreign aid disbursement increased by 170 percent in the first half of the current financial year, although current account balance remains under pressure due to import surge.

Aid disbursement during July-December period of the 2004-05 fiscal amounted to US$674 million, which was $249 million during the same period of last fiscal.

According to sources, foreign direct investment (FDI) registered a slight increase by 6.2 percent during the period. FDI inflow amounted to $205 million during the period, which was $193 million in the corresponding period of FY2003-04.

Current account balance recorded a deficit of $92 million in the first half against a surplus $260 million during the same period of last fiscal.

World Bank's $200 million fund for the development support credit in August, increase in flood-related aid and slightly expediting the pace of project implementation are the main reasons for increasing the disbursement during July-December period of 2004-05 fiscal, Economic Relations Division (ERD) sources said.

Project aid expenditure of the allocation was 33.5 percent in first seven months of the current financial year, which was around 14 percent during the same period of last fiscal, planning ministry sources added.

Current account balance remains under pressure as import surged by more than 23 percent during July-December period of this fiscal but remittance growth was only eight percent and export saw a 10 percent growth in the first seven months of this fiscal.

Import of food grains including rice, wheat went up sharply in the recent months while capital machinery and scrap vessels import rose heavily in the first half of the current fiscal year.

Trade deficit shot up by 53 percent in the first six months of this fiscal amounting to $1437 million, which was $937 million during the same period of last fiscal.