Foreign Assistance Spending Down 5.87%

Bangladesh is actively negotiating a billion-dollar aid package with the World Bank and the Asian Development Bank (ADB) to address the socio-economic challenges faced by the Rohingya population and host communities.

The government's short-term borrowing through treasury bills witnessed a 50 basis points surge to 11%, attributed to heightened demand for bank loans by state authorities. In the recent auction, the government borrowed Tk4,218 crore at a 10.8% interest rate for 91 days, Tk501 crore at 11% for 182 days, and Tk422 crore at 11.20% for 364 days.

Bangladesh's fiscal deficit expanded to Tk 1.98 trillion in the FY 2022-23, surpassing the previous year's Tk 1.84 trillion, due to slower-than-expected tax collection and increased spending. The total budget for FY2022-2023 rose to Tk 5.63 trillion from Tk 5.20 trillion.

In FY23, the government executed only 86.15% of the revised budget for the fiscal year, citing global war repercussions and domestic inflationary pressures as contributing factors. This represents a 2.52 percentage point decline from the previous fiscal year. The total spending amounted to Tk 5.65 trillion, falling short of the Tk 6.56 trillion revised budget.

The 8th Five-Year Plan (8FYP) in Bangladesh has encountered challenges due to global inflationary pressures from the Ukraine War, with key targets off track, according to a planning ministry review. The report reveals that the balance of payment targets was derailed in the first half of the 8FYP.

The government, with World Bank support, is set to allocate Tk 2.7 billion in incentives for 200,000 returning migrant workers under the 'Recovery and Advancement of Informal Sector Employment (RAISE)' project. Amid the challenges faced by workers who returned during the COVID-19 pandemic, each of the eligible returnees will receive Tk 13,500 from the government by December 2023.