Govt Seeks World Bank and IFC Support for Reforms Programs

The interim government has yet to act on the recommendations of the White Paper and task force report on Bangladesh's economy, despite their submission on December 1, 2023, and January 30, 2024, respectively. Economist Prof. Selim Raihan, a panel member, stated that no discussions have taken place within the government or among ministries regarding the reports' findings.

Bangladesh's interim government has traced assets linked to former Prime Minister Sheikh Hasina and her family in six countries, including the US, UK, Malaysia, Singapore, Hong Kong, and the Cayman Islands, freezing over Tk 6.35 billion from 124 bank accounts and seizing properties worth Tk 88.5 million.

The Bangladesh government is increasing its food subsidy allocation by nearly 12%, raising the total to Tk 8,100 crore, aiming to enhance food distribution programs and support low-income groups. This decision follows production losses due to flash floods and persistent inflation, with food inflation reaching over 14% last year before easing.

Interest payments on government borrowings reached Tk625.6 billion in the first half of FY25, consuming over 55% of the annual allocation. This marks a 27% rise from the same period in FY24. Domestic interest payments accounted for Tk535.38 billion (58% of the annual estimate), while foreign interest payments stood at Tk50.22 billion (44%).

The government of Bangladesh spent Tk 186,286 crore in operating expenditures during the first half of FY25, representing 36.7% of the total allocation, up from 31.2% in the same period of FY24. According to the latest Monthly Fiscal Report by the Finance Division, the accelerated spending is primarily driven by interest payments, public order, safety, and subsidies.

In the first six months (July-December) of FY 2024-25, the government borrowed Tk 6,744 crore from banks, raising total bank debt to Tk 4,75,666 crore by December. Non-bank borrowing also increased, reaching Tk 24,688 crore, compared to Tk 7,090 crore in the same period last fiscal year.