Government Seeks $1.5 Billion in Budgetary Assistance

The three-day shutdown and subsequent violence over the quota reform movement have severely disrupted Bangladesh's economy, already struggling with high inflation, falling exports, and dwindling forex reserves. Factories, including the key garment sector, shut down, fearing further violence and arson.

Bangladesh's government internal debt reached nearly 9 lakh crore taka by April, due to financial crises, lack of investment environment, and downgraded credit ratings, which reduced both domestic and foreign investments. The government's internal borrowing rose by around 1.04 lakh crore taka over the past year,

The Asian Development Bank (ADB) will review nearly $13 billion worth of projects in Bangladesh next week due to implementation delays. A tripartite meeting involving the ADB, the Economic Relations Division (ERD), and project implementers will be held in Dhaka from July 22 to 24 to address these issues.

Government entities are projected to incur expenses 4.68 times higher than the total loss of Tk 5,989.57 crore incurred in FY24, according to projections made by a monitoring cell of the Finance Division under the Ministry of Finance.

In order to stop tax evasion and avoidance, Mauritius and Bangladesh have signed an additional agreement to their Double Taxation Avoidance Treaty (DTAA). The following significant modifications are included in the rules, which will take effect on July 1, 2025.

Bangladesh's private sector entrepreneurs, initially attracted by low interest rates on foreign loans, now face significant challenges due to currency devaluation and a dollar crisis. As of May FY24, the sector's foreign debt stood at $11.04 billion, with $2.02 billion borrowed from the UAE. Rising interest rates and a 32% increase in the dollar rate have diminished interest in foreign loans, prompting a shift towards domestic borrowing.