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.
The government has published rules stating where and how pension funds will be invested so that the National Pension Authority (NPA) can produce better returns at lower risks, a move that will ease its repayment burden.
The unit will work under the Finance Division
The government is going to amend the Bangladesh Bank Order, 1972 to align it with global best practices and give the central bank more autonomy so that it can initiate steps to help the economy deal with pressure.
The central bank discovered six types of statistical wrongdoing that inflated export data, a development that led to a multibillion-dollar correction.
For the sixth consecutive year, the finance division has imposed several restrictions on allocated budget expenditures, including foreign tours and block allocation, as a part of austerity measures amidst the ongoing economic crisis.
Bangladesh will seek fresh loans amounting to $20 billion during Prime Minister Sheikh Hasina’s upcoming visit to China, which Beijing hopes would be a “game changer” in the bilateral relationship.
The government aims to borrow more from the domestic sector at fixed rates and for longer periods and cut reliance on Treasury bills with a view to keeping debt risks lower and avoiding exchange rate volatility.
Talks on Chinese loan proposals will be at the fore during Prime Minister Sheikh Hasina’s upcoming visit to Beijing.
Bangladesh is going to fulfil the International Monetary Fund’s condition on foreign exchange reserves in June on the back of record budget assistance from global creditors, the first time since the IMF approved its $4.7 billion loan programme more than a year ago.
The International Monetary Fund has suggested an alternative to reducing agricultural subsidies -- raising fertiliser prices and providing cash or vouchers for certain farm inputs to support poor farmers.
