Rejaul Karim Byron

The International Monetary Fund staff mission yesterday expressed reservations about the likelihood of Bangladesh meeting the minimum reserve requirements for the second tranche of the $4.7 billion loan.

The central bank’s planned move to a single, more market-determined, exchange rate would be central towards stabilising the precarious foreign exchange reserves and reducing external imbalances, said global ratings agency Fitch yesterday.

The government plans to increase its development spending slightly in the upcoming fiscal year due to the narrow fiscal space, the dollar crisis, the conditions attached to the IMF’s loan programme, and higher expenses on subsidies and interest payments. 

The World Bank Group is set to provide Bangladesh with upwards of $2 billion every year over the next four years to help the country gear up for its next phase of development.

There is likely to be yet another increase in electricity tariff by June as the government looks to shed its subsidy burden in line with the demands of the International Monetary Fund.

The IMF staff mission is set to begin its next series of meetings with the Bangladesh authorities today to measure how the country is faring with the $4.7 billion loan programme.

The government is set to enact the first-ever public audit law that will usher in more transparency and accountability in public expenditure and expand the scope of the Office of the Comptroller and Auditor General of Bangladesh.

Bangladesh’s spending on subsidies and interest payments surged 45 per cent year-on-year in the first eight months of this fiscal year, turning out to be the highest in at least a decade.

The 5.5 percent growth forecast made by the International Monetary Fund for the Bangladesh economy would be decent given the pressure emanating from the external side, said a top official of the multilateral lender yesterday.

The poverty rate in Bangladesh has dropped significantly but income inequality is at an all-time high, according to the latest version of the Household Income and Expenditure survey -- in a puzzling development that raises questions about the nature of economic growth seen in recent times.

The poverty rate in Bangladesh has declined to 18.7 per cent and the extreme poverty rate stood at 5.6 per cent, according to the latest data from the Bangladesh Bureau of Statistics (BBS).

Bangladesh is poised to meet five of the six targets set by the International Monetary Fund for March as part of the $4.7 billion loan programme.

The finance ministry has already finalised the revised budget for this fiscal year and the concerned ministries are informed about it but it will not be made public until June.

The government is set to present a 12 percent bigger budget for fiscal 2023-24, the last of the Awami League government’s present tenure, as it looks to juggle austerity and growth ambitions.

The World Bank today said Bangladesh’s GDP would grow by 5.2 per cent in the current financial year, unchanged from its January forecast, as elevated inflation, tighter financial conditions, disruptive import restrictions, and global economic uncertainty keep hurting the economy.

The government is set to increase the amount of allowance under the social safety net programme in the next budget to cushion the poor from the impacts of high inflation.

The government is on track to meeting the International Monetary Fund’s tax collection target for March but may miss the mark in June.

The central bank has said the government will have to borrow more from non-banking sources to finance its expenditures in a bid to rein in higher inflationary pressures as the latter’s bank borrowing surged.

It seems the Bangladesh economy is stuck in a time warp, going by the latest edition of the Labour Force Survey unveiled yesterday.

In the end, was the government’s austerity stance just lip service?