WB likely to approve $75m budgetary support credit

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FE Report
The World Bank (WB) is likely to approve tomorrow (Thursday) the proposed US$75 million budgetary support credit for Bangladesh at its board meeting in Washington.
An official in the World Bank Dhaka office Tuesday said that its board meeting on September 27 was expected to endorse the proposal on the credit, which Bangladesh requires to minimise the pressure on budgetary resource management caused by recent floods.
After the approval at the board meeting, the WB Dhaka office might sign a loan deal with the government of Bangladesh in the first week of October, the official said.
He said that the proposed loan was expected to be disbursed in early October so that the government could utilise it to recover the flood losses.
Earlier, the Economic Relations Division (ERD) completed negotiation with the World Bank in Dhaka for the proposed $75 million loan, which the lending agency says will be provided as a supplementary fund to the development support credit (DSC).
The ERD sources said the World Bank will not attach any condition for disbursement of the new credit, which is being provided in response to Bangladesh's appeal for $150 million budgetary support.
Finance Secretary Mohammad Tareque at a meeting of the local consultative group (LCG) on August 19 in Dhaka requested the donor to provide the credit to minimise pressure on the national budget and overcome the economic shocks caused by the recent flood.
In June last, the present caretaker government unveiled a Tk 871.37 billion budget for fiscal 2007-08, with the budgetary deficit running at 4.8 per cent of GDP (gross domestic product) as against 3.3 per cent in the last fiscal.
The additional loan is also needed to meet the government's foreign aid requirement worth Tk 63.05 billion as set for the current fiscal. The target was Tk 51.83 billion in the revised budget for the last fiscal.