The Asian Development Bank has agreed to provide up to $1 billion in budget support by June, but the government must commit to several terms that include reducing the tenure and number of private bank directors.
The costs of eight mega projects soared by a staggering 68 percent, or $7.52 billion from the initial estimation, mainly due to poor and faulty feasibility studies, corruption, and delays in launch, according to the report of a government-formed task force.
The International Monetary Fund has set a prior condition for introducing a full 15 percent statutory VAT rate on 213 products before placing the $645 million loan proposal for the fourth tranche to its executive board.
Finance adviser talks about govt’s 3 strategies to ease economic strain
The interim government may consider a dearness allowance for lower-grade government staff to provide respite from the ongoing high inflation.
Subsidies for the power sector are likely to balloon 83 percent this fiscal year as the interim government is planning to clear all arrears owed to private power producers.
As much as $670 million (around Tk 8,200 crore) from slow-moving World Bank-funded projects will be repurposed, with most of the funds going towards budget support as the government looks to navigate the narrow fiscal space amid a slowing economy.
Over half of the government’s total revenue expenditure during the first four months of the current fiscal year of 2024–25 was on interest payments alone, mainly due to increased borrowing and a rise in the interest rates.
Bangladeshi nationals and banks kept 17.71 million Swiss francs (CHF) in deposits last year in the banks of Switzerland, the lowest on record, reflecting the fading attractiveness of the country among the wealthy to park money.
India may offer Bangladesh fresh loans under a new framework, as implementation of the projects under the existing loan programme is proving difficult due to some strict loan conditions.
The International Monetary Fund will discuss releasing $1.15 billion in the third instalment of its loan to Bangladesh during its board meeting on June 24. This is part of the IMF’s $4.7 billion loan programme for the country.
Bangladesh’s foreign currency reserves are set to receive as high as $2 billion this month, which may send the total to nearly $21 billion, handing a much-needed relief to the US dollar supply.
The private sector’s short-term foreign debt in Bangladesh made a turnaround for the first time in more than a year in April, handing a much-needed fillip to the foreign currency reserves.`
Bangladesh has agreed to buy 40 megawatts of electricity from Nepal at Tk 8.17 per unit, including transmission cost, under a five-year agreement.
The revised gross forex reserves target for the current fiscal year ending on June 30 was $29.1 billion. It stood at $24.23 billion on June 5, according to the traditional calculation of the Bangladesh Bank. To meet the goal, another $4.87 billion will have to be added to the reserves by this month.
More than a third of the subsidies allocated in the new budget is for the power sector due to what experts say is the huge spending on capacity charges.
Finance Minister Abul Hassan Mahmood Ali yesterday expressed hope that the government would be able to curb high inflation on the back of budgetary measures and the central bank’s steps.
The government will rely more on domestic bank borrowing than foreign financing in the next fiscal year, intensifying pressure on the economy.
