Rejaul Karim Byron

The International Monetary Fund would be watching the Bangladesh economy like a hawk, stipulating an extensive list of data reporting regularly as part of the conditions agreed upon for the $4.7 billion loan programme.

The government is poised to adopt a set of guidelines that will fundamentally change the way 40 percent of the annual budget is spent, focusing on the whole life cycle cost of goods and services rather than the lowest tender offer in public procurement.

Bangladesh has ramped up its activity in the international spot market for liquefied natural gas after the recess of seven months, purchasing yet another cargo in a space of two weeks as the government looks to ensure adequate supply ahead of Ramadan and the summer months.

The country’s per capita external debt currently stands at more than double from what was seven years ago as both public and private sector foreign loans have seen an increase by this time.

The private sector’s foreign debt decreased by 4.3 per cent, or more than $1 billion, in the second quarter of the current fiscal year following Bangladesh Bank’s strict measures to control imports.

The record subsidy allocation of Tk 82,745 crore is set to be topped up with another Tk 27,360 crore in the revised budget in the face of demands from ministries even after the notable price hike of gas, electricity and fuel.

Bangladesh has a low risk of external and overall debt distress despite higher external borrowing in recent terms, said the International Monetary Fund.

The International Monetary Fund has identified the problems in the banking system, including the high volume of defaulted loans, as one of the three domestic risks that derail the economy in the short- to medium-term.

Bangladesh is expected to get about $6 billion over the next four years from development partners other than the International Monetary Fund to meet the development financing needs, particularly to address climate change challenges.

The International Monetary Fund has laid out 20 conditions for Bangladesh for its $4.7 billion loan programme aimed at restoring macroeconomic stability, accelerating overdue macroeconomic reforms and tackling climate change challenges.

The International Monetary Fund’s $4.7 billion loan programme won’t be a miracle worker for the Bangladesh economy.

The government is expecting the shrinking foreign currency reserves will buck the trend and hit $37.7 billion by June thanks to lower imports and budget support from development partners.

Apart from export and remittance earnings, the government has placed importance on securing more foreign funding in the current fiscal year to shield the country’s foreign currency reserves from depletion. 

It seems the government is doing an about-turn from the austerity stance taken at the start of the fiscal year.

Scaling up public food distribution programmes for the poor and the vulnerable is the need of the hour -- given the cost of living crisis. But the government seems to be shying away from stepping up to this task.

The prospective loan programme of the International Monetary Fund will prime Bangladesh for graduation from the least-developed country bracket and reach middle-income country status by 2031, said the lender’s top official.

There would not be any further negotiations on the $4.5 billion loan programme during International Monetary Fund’s deputy managing director Antoinette Monsio Sayeh’s forthcoming visit to Bangladesh.

The World Bank yesterday delivered yet another bad news for the economy as the Washington-based multilateral lender pared back Bangladesh’s growth forecast for this fiscal year by 1.5 percent to 5.2 percent.

Two of the government’s 28 Covid-19 stimulus packages saw a fresh injection of Tk 50,000 crore in the ongoing financial year, but only 4 per cent of the fund was disbursed between July and October.   

The maiden tax amnesty offered by the government to bring back laundered money home has seemed to have brought no result since none secured the facility in the first six months of the current fiscal year.