Rejaul Karim Byron

Bangladeshi nationals and banks kept 17.71 million Swiss francs (CHF) in deposits last year in the banks of Switzerland, the lowest on record, reflecting the fading attractiveness of the country among the wealthy to park money.

India may offer Bangladesh fresh loans under a new framework, as implementation of the projects under the existing loan programme is proving difficult due to some strict loan conditions.

The International Monetary Fund will discuss releasing $1.15 billion in the third instalment of its loan to Bangladesh during its board meeting on June 24. This is part of the IMF’s $4.7 billion loan programme for the country.

Bangladesh’s foreign currency reserves are set to receive as high as $2 billion this month, which may send the total to nearly $21 billion, handing a much-needed relief to the US dollar supply.

The private sector’s short-term foreign debt in Bangladesh made a turnaround for the first time in more than a year in April, handing a much-needed fillip to the foreign currency reserves.`

Bangladesh has agreed to buy 40 megawatts of electricity from Nepal at Tk 8.17 per unit, including transmission cost, under a five-year agreement.

The revised gross forex reserves target for the current fiscal year ending on June 30 was $29.1 billion. It stood at $24.23 billion on June 5, according to the traditional calculation of the Bangladesh Bank. To meet the goal, another $4.87 billion will have to be added to the reserves by this month.

More than a third of the subsidies allocated in the new budget is for the power sector due to what experts say is the huge spending on capacity charges.

Finance Minister Abul Hassan Mahmood Ali yesterday expressed hope that the government would be able to curb high inflation on the back of budgetary measures and the central bank’s steps.

The government will rely more on domestic bank borrowing than foreign financing in the next fiscal year, intensifying pressure on the economy.

With an aim to restore macroeconomic stability, reduce inflation, and contain pressure on foreign currency reserves, Finance Minister Abul Hassan Mahmood Ali is going to place a Tk 7,96,900 crore budget for the 2024-25 fiscal year tomorrow.

The overall revenue generation target will be Tk 537,000 crore in the new fiscal year that begins on July 1, which is 7.4 percent higher than that of the goal of the outgoing financial year.

The subsidies and incentive expenditures in the upcoming budget are going to be more than that of the current fiscal year.

The government has not addressed the stability issue through its fiscal policy for two years in a row although the economy is in turmoil owing to both external and internal pressures. A noted economist, however, thinks it can bring the situation under better control through the budget in the next fiscal year beginning on July 1.

Fighting raging inflation and putting the economy back on track have not been taken seriously as evidenced from the government’s delayed response, which set the scene for one of the worst economic crises in its history and an unprecedented prolonged period of higher consumer prices, said an economist. 

The government is not moving at full throttle in bringing discipline to the banking sector, implementing reforms wholeheartedly, taking measures against syndication, and bringing money launderers under the rule of law, said a top economist.

As the government wants to lower expenses, it is likely to contain the budget deficit to 4.6 percent of gross domestic product in the next fiscal year, a level seen a decade ago.

After the IMF’s loan, the World Bank is now going to provide $500 million in budget support to Bangladesh, double from what it had initially planned, by the end of June, said finance ministry officials.

The allocation for interest payments of domestic and foreign loans will likely increase by 38 percent to Tk 129,000 crore in the upcoming budget due to a significant hike in the cost of borrowing from both sources

After more than seven years of discussion, the government is set to finally undertake two projects involving Tk 8,483 crore for the Rohingya and host communities.