The World Bank (WB) and Asian Development Bank (ADB) are preparing to offer $1.1 billion in budget support to Bangladesh, with $500 million expected from the WB and $600 million from the ADB. The WB’s loans, under the Second Green and Climate Resilient Development Credit programme, are scheduled for approval in December 2024 and include climate-related conditions, such as increasing the climate budget allocation from its current 7.5% of the national budget and ensuring effective monitoring. The ADB’s loans, originally tied to LDC graduation preparations, will now focus on reforms under the Strengthening Economic Management and Governance Programme.
These loans aim to ease pressure on foreign reserves and bolster economic stability. Reform conditions include VAT automation, enhanced tax compliance, and improved state-owned enterprise evaluations. Bangladesh Bank and IMF officials have endorsed this move, viewing it as critical for stabilizing inflation and reserves amid global economic uncertainties.
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