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 initially estimated costs of these projects were $11.2 billion in total
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.
The government is thinking about allowing again undisclosed money to be legalised and laundered money to be brought back home through formal channels in the next budget.
It will be supported by the recent improvement of the current account balance to modest surpluses partly reflecting ongoing import restrictions, narrowing financial account deficits as business uncertainties gradually ease following the conclusion of the general elections in January, it said.
The government’s allocation to repay foreign debts may reach Tk 57,000 crore in the next budget, a 53 percent rise from the current year, putting further pressure on the country’s dwindling foreign currency reserves.
The government has to spend about 40 percent of the next budget on subsidies, interest payments, and salaries and allowances of government employees, which will limit its ability to spend on social safety net, health and education.
The government is set to increase budget allocation for quick completion of the Rooppur nuclear and Matarbari coal-fired power plant projects.
According to the Bangladesh Bureau of Statistics (BBS), food inflation jumped 35 basis points to 10.22 percent last month from 9.87 percent in March. This was the first time in five months that food inflation hit double digits.
Prime Minister Sheikh Hasina yesterday directed the finance ministry to formulate a contractionary budget for the upcoming fiscal year to control inflation.
Education and health sectors are set to get less Annual Development Plan allocation than prescribed in the eighth five-year plan.
Bangladesh Bank’s steps to boost the country’s foreign currency reserves will not yield any positive results overnight.
Thanks to bold reform measures taken by the authorities, the IMF has drastically slashed the Net International Reserves (NIR) requirement for Bangladesh for the fourth tranche of the $4.7 billion loans.
