Rejaul Karim Byron

Government debt increased 13.3 percent last fiscal year to a record Tk 18.3 lakh crore, raising concerns about repayment amid the low revenue mobilisation.

The interim government is set to increase the interest rates against various savings certificates to upwards of 12 percent as it looks to provide some relief to the fixed income group squeezed by the elevated inflation.

Foreign exchange reserves are showing encouraging signs of stability due to record remittance inflows and rising exports, but private sector investment remains a concern for the government.

The Asian Development Bank (ADB) has outlined 20 conditions for Bangladesh to access $600 million in the second tranche of a loan for the implementation of its “Strengthening Economic Management and Governance Program”.

Two years after Bangladesh turned to the International Monetary Fund (IMF) for a $4.7 billion bailout to address its worsening macroeconomic pressures, the nation stands at a crossroads.

The government has planned a Tk 8.48 lakh crore budget for the next fiscal year, up 6.3 percent from this year’s budget, as it looks to usher in a period of moderate growth and low inflation.

The planning ministry’s taskforce for sustainable development has drafted a report with proposals to fix the economic fault lines identified by the white paper on the economic state of the country and achieve moderate economic growth.

The health ministry’s development spending has dropped substantially year-on-year in the first five months of the current fiscal year, despite the interim government’s move to raise its allocation in the revised budget.

The Asian Development Bank (ADB) has become the first among multilateral and bilateral lenders to respond to the interim government's call for budgetary support, approving $600 million aimed at easing pressure on foreign exchange reserves and accelerating economic recovery.

The International Monetary Fund (IMF) has offered an additional $1 billion to Bangladesh but the government is pushing for at least $2 billion to implement the interim government’s reform agenda, narrow the deficit in the current account and shore up the dollar stockpile.

Bangladesh’s national budget for fiscal year 2024-25 is likely to be reduced by more than Tk 50,000 crore, with the entire cut expected to be made in funds meant for the annual development programme (ADP).

A total of $234 billion was siphoned off from Bangladesh between 2009 and 2023, according to the white paper on the state of the economy.

Distressed assets in the banking sector have reached a whooping Tk 6,75,030 crore, an amount bigger than the cost of building 22 bridges across the Padma or 13.5 metro rail systems in Dhaka, according to a White Paper released yesterday.

Bangladesh is on track to meet all 12 conditions set by the International Monetary Fund (IMF) to qualify for the fourth tranche of a $4.7 billion loan programme, only missing the revenue collection target.

Bangladesh has lost around $14 billion a year on average to capital flight during the Awami League’s 15-year tenure, according to the draft report of the committee preparing a white paper on the economy.

The interim government is struggling to pay the power bill arrears that were caused largely by “unfair” contracts signed between the previous administration and power producers, and rising international fuel prices.

Bangladesh to utilise the fund to speed up reforms, stabilise reserves

The interim government is going to curtail its expenditure focusing on the budget for 2024-25 in order to keep fiscal pressure within its control, contain inflation and prevent foreign currency reserves from falling further.

The Bangladesh Bank (BB) should take measures to prevent “second-round effects” of inflation, the International Monetary Fund (IMF) said.

The World Bank has committed to giving Bangladesh $400 million for implementing the next five-year plan for the health sector, which is estimated to cost around $9 billion.