WB to give $320m to help offset budget deficit
FHM Humayan Kabir |
June 17, 2008 00:00:00
The government is likely to receive US$320 million worth of credit from World Bank later this month to help offset the budget deficit in the current fiscal, an official said Monday.
"Bangladesh government will sign a deal with the World Bank in Washington tomorrow (June 17) to get the $320 million budgetary support credit. The Bank is providing the fund to minimise the budget deficit in fiscal 2007-08," a senior economic relations division (ERD) official told the FE.
The budget deficit in the outgoing fiscal stood at 4.8 per cent of the total gross domestic product (GDP). In the original budget, the finance adviser projected the deficit at 4.2 per cent of total GDP.
The deficit in the revised budget has gone up as the government is required to spend more funds for rehabilitation works in the flood and cyclone-Sidr hit areas, payment of subsidy to petroleum and fertiliser and additional expenditure on food import.
The global lender earlier said it would to provide $200 million as transitional budget support credit and another $120 million as energy sector development policy loan (budgetary support credit) to the government.
"The proposals for the two loans will be placed before the World Bank board in Washington tomorrow (Tuesday) for approval. The Bangladeshi ambassador in Washington will sign the loan agreement with a senior World Bank official the same day," the ERD official said Monday.
"We have been waiting for the budgetary support credits from the global lender for long," he said.
The government on April 25-26 completed negotiations with the World Bank in Dhaka to get the US$200 million transitional budget support credit.
Besides, another successful negotiation with the Washington-based lender was completed on May 12 in Dhaka for getting $120 million energy sector development policy loan.
The government has already received $175 million budgetary support credit from the World Bank to recoup the losses and damage caused by floods and cyclone Sidr late last year.
