Dhaka, Jan. 31 -- The pipeline of foreign aid - funds available for disbursement - narrowed to $42.09 billion in FY25, marking a 3.99-percent fall from the previous fiscal year to hit the lowest level since FY18, according to the latest Economic Relations Division (ERD) report.

Although donors disbursed $933 million more than the new commitments made during the fiscal year, the overall pipeline still shrank by $1.75 billion mainly due to the cancellation of $1.177 billion in pledged funds and adjustments arising from exchange-rate fluctuations.

Experts and economists have welcomed this, interpreting it as an indication of improved capacity in aid utilisation.

However, they caution that the pace of development could slow in the coming y...