Rejaul Karim Byron

Bangladesh must clear dues, hit steep revenue, reserve targets for next tranche

Bangladesh plans to launch a Tk 316 crore reform programme aimed at significantly speeding up project planning, approval, and implementation through the use of artificial intelligence for the first time.

The government plans to scale back its dependence on foreign loans as it seeks to mitigate threats to external debt sustainability.

Jumped to 589.5m francs in 2024 from 17.7m the previous year

For the first time, the World Bank, which traditionally provides development project loans and budgetary support, has extended its assistance through a guarantee facility to support Bangladesh in purchasing liquefied natural gas (LNG), aiming to ease pressure on the country’s foreign exchange reserves.

The loan utilisation period for the Rooppur Nuclear Power Plant is set to be extended by three years, as about $3.38 billion of the Russian credit remains unspent after the original deadline expired in December 2024.

Bangladesh's total debt reached Tk 1,944,171 crore by December 2024, increasing debt servicing pressure

The proposal to release the third and fourth tranches of the International Monetary Fund’s $4.7 billion loan is set to be presented to the multilateral lender’s board on June 23 after the government fulfilled all prior conditions.

The finance ministry has identified seven major challenges including tight monetary and fiscal policies, taken to tame elevated inflation levels for more than three years, in next fiscal year that may increase unemployment.

The government expects the country’s economy to cross the $500 billion mark in the fiscal year (FY) 2026-27, buoyed by stabilising policies and sectoral improvements.

The interim government proposed a new framework for social safety net programmes, under which 7.68 crore poor people would receive Tk 37,076 crore next fiscal year to help them cushion the blow from high inflation over the last three years.

The government’s target to provide subsidies and incentives amounting to Tk 125,741 crore in fiscal year 2025-26 is creating high pressure on fund mobilisation amid a challenging macroeconomic situation.

Govt puts inflation control, revenue reform, fiscal restraint at the heart of its economic plan

Budgetary spending increased by 17.5 percent year-on-year in the first nine-month period of the current fiscal year of 2024-25, mainly due to a rise in spending on interest payments and subsidies.

Bangladesh’s gross domestic product is projected to surpass the $500 billion mark for the first time in the upcoming fiscal year contingent upon exchange rate stability.

Three mega projects will get special focus in the upcoming development budget with the view to providing cheaper electricity, easing Dhaka dwellers’ transportation problem and enhancing international trade for Bangladesh.

Bangladesh’s GDP grew by 3.97 percent this fiscal year, the slowest in 34 years excluding the pandemic, on the back of lower growth in the agriculture and service sectors.

As much as Tk 122,000 crore is expected to be allocated for interest payment in the budget for the upcoming fiscal year, which is about 22 percent of the total revenue budget.

The interim government expects the country’s gross foreign exchange reserves to rise to $34.4 billion by the end of the fiscal year (FY) 2025–26, buoyed by strong remittance inflows, export performance, and budgetary support from development partners.

The budget for fiscal 2025-26 is likely to be smaller than the current year’s outlay, but subsidy spending is expected to remain almost unchanged at Tk 1,15,741 crore.