Poor inflow of foreign aid in Bangladesh is already biting the economy, forcing the government to borrow heavily from the internal sources.

Debpriya Bhattacharjee, a noted economist and executive director of the Center for Policy Dialogue, a civil society think tank, told Xinhua Sunday the drastic fall in the foreign aid will not immediately affect the country's import as the foreign exchange reserve of the country was above 2 billion U.S. dollars.

"But it will slow down the development activities, which might affect the country's Gross Domestic Product (GDP)," he said.

Bhattacharjee said as a result of the drastic fall in the foreign aid, domestic sources contributed to 90.6 percent of the overall financing while the rest 9.4 percent came as foreign financing.

He said the country's economy would suffer a severe blow in case the government fail to manage a big amount of foreign aid package ranging from 350 million to 500 million U.S. dollars immediately.

Bhattacharya said the amount of foreign aid was 699 million dollars during the July-October period of the previous financial year, but the amount fell down to 199.29 million dollars in the corresponding period of the current fiscal year and the fall was 55 percent that of the previous year.

The economist said the low flow of foreign aid created a severe pressure on the government, forcing it to borrow from the local banks to keep intact the development process and run the expenditure.

Source: Xinhua