Foreign Assistance Spending Down 5.87%

Bangladesh is facing delays in Indian Line of Credit (LoC)-funded projects due to contractors and workers abandoning sites after the previous government fell. Despite security assurances, no Indian contractors have returned, worsened by slow fund disbursements since the establishment of the interim government led by Professor Muhammad Yunus. 

The Bangladeshi government has sought assistance from the World Bank and its private sector arm, the International Finance Corporation (IFC), to support reform programs. Finance Adviser Dr. Salehuddin Ahmed met with a delegation from both institutions to discuss reforms in the financial sector, the revenue board, and private investment. He plans to address funding requirements further during the World Bank's upcoming annual meetings in Washington, D.C.

The Bangladesh interim government has restructured a nine-member inter-agency taskforce to recover money illegally transferred abroad, with the taskforce now headed by the Bangladesh Bank governor. The previous taskforce, established by the Awami League government, was led by the attorney general.

The implementation rate of Bangladesh's Annual Development Programme (ADP) in July-August of this fiscal year hit a 12-year low due to cautious government spending and political disruptions. The government allocated Tk 278,288 crore for the ADP, a 9.6% increase from last year's revised budget.

The implementation of the revised budget for the fiscal year 2023-24 stands at 84%, while the original budget execution is lower at 79%. Analysis from the Ministry of Finance reveals that national budget execution has stagnated, with actual spending consistently falling about Tk 1 lakh crore short of the announced budget over the past three years. This year, spending was over Tk 1.5 lakh crore less than the original budget.

Net sales of national savings certificates (NSCs) in Bangladesh increased to Tk 2,187 crore in July, recovering from a negative balance of Tk 3,381 crore in June. This rebound is mainly attributed to depositors moving their funds from struggling banks to safer investments amid a banking crisis that has diminished public trust. Political unrest, including student protests and curfews, has further driven individuals toward secure financial instruments.