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.
A task force formed by the planning ministry is going to recommend the formation of an independent centre for delivering government services via social media and utilising artificial intelligence (AI).
The interim government has increased interest rates on various national savings certificates to upwards of 12 percent in an effort to make these instruments more attractive to savers and to cool inflation.
After the World Bank, the International Monetary Fund has now brought down Bangladesh’s growth forecast for this year as political uncertainty, industrial unrest and floods weigh heavily on economic activities.
Bangladesh’s foreign debt servicing surged 29 percent year-on-year in the first three months of fiscal 2024-25 owing to the country’s expanded foreign loan portfolio and the rise in global interest rates.
The government is expecting at least $5.65 billion in budget support this fiscal year from the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB) to expedite reforms.
The government has identified a dozen slow-paced projects funded by the World Bank, from which up to $1.5 billion will be repurposed and utilised as budget support or in other policy-based reform programmes.
Bangladesh could increase its output in the manufacturing, service and farming sectors by up to 29 percent simply by bringing more women into the workforce, according to the World Bank.
The Washington-based multilateral lender’s Business Ready (B-Ready) report, which was released yesterday, also places Bangladesh in the fourth tier of five stages for public service delivery, indicating weaker performance in this area too
The World Bank has slashed its forecast for Bangladesh’s economic growth by 1.7 percentage points to 4 percent for FY25 due to “significant uncertainties following recent political turmoil” and “data unavailability”.
Four years after its approval, the cost of the Matarbari deep-sea port project in Cox’s Bazar has escalated, while the deadline has been pushed back too.
Bangladesh’s banking sector was not well-managed in recent years. Banks mostly gave loans to their owners, rather than to creditworthy entities. Consequently, several banks are now in difficulty.
The International Monetary Fund (IMF) has reaffirmed its support for Bangladesh’s interim government in overcoming the various economic challenges the country has been facing in recent times.
