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.
Finance Adviser Salehuddin Ahmed has vowed to mete out exemplary punishment to big loan defaulters as the interim government scrambles to fix the ailing banking sector of Bangladesh.
The Bangladesh Bank may increase the policy rate for both local and foreign currencies in a bid to reduce inflation and increase international reserves.
Bangladesh’s worsening economic crisis has spun off a price shock with food inflation crossing 14 percent in July for the first time in 13 years.
The priorities of newly appointed finance adviser Salehuddin Ahmed should be to make key financial institutions functional immediately, control inflation, and present accurate data on exports, imports, GDP and important economic indicators, economists said.
The amount of bad loans has been spiralling in Bangladesh owing to rampant politically-motivated lending and inadequate credit risk management, according to a World Bank report.
Total foreign debt servicing, including repayment of the principal amount as well as interest, rose to $3.35 billion in financial year 2023-24 from $2.67 billion in 2022-23.
Bangladesh is unlikely to fulfil the revenue collection target set by the International Monetary Fund (IMF) as part of its conditions for the fourth tranche of a $4.7 billion loan programme.
The government’s borrowing through the sales of treasury bonds and bills jumped fivefold in the last fiscal year, which raised its debt servicing cost compared to the level projected initially.
Bangladesh Telecommunications Company Limited (BTCL) has failed to realise dues worth around Tk 316 crore from different companies and falsely recorded it as “current asset” in its financial statement.
Bangladesh Bank is going to unveil the monetary policy for the first half of fiscal year 2024-25 tomorrow and is expected to retain its tight monetary stance as its foremost target is to bring down the spiralling inflation.
