WB likely to give $100m for reducing deficit financing
Sunday, 2 September 2007
FE Report
A World Bank (WB) mission will arrive in Dhaka on September 10 for holding talks with the government on a proposed US$100 million transitional budgetary support to Bangladesh.
The WB fund, if provided, will help the government minimise deficit financing in the current fiscal and continue its reforms in the country's power sector, official sources said.
A senior Economic Relations Division (ERD) official told the FE that the mission would review Bangladesh's power sector reforms and prepare further action plans for the proposed $100 million loan during its stay in Dhaka from September 10 to 19, they said.
The WB mission is coming to Dhaka in response to the caretaker government's request for the budgetary support.
The government took up a Tk 871.37 billion national budget for fiscal 2007-08 with an overall deficit of Tk 298.36 billion, which is 5.6 per cent of the gross domestic product (GDP). The budget deficit was 3.3 per cent of the GDP in fiscal 2006-07.
The ERD official expressed the hope that following the visit by the World Bank mission, the Division would be able to complete the negotiations for the $100 million power sector budgetary support credit by November next.
"If the negotiation is completed by November, the Bank might disburse the $100 million credit in December this year. The amount will strengthen the budgetary resources position for the current fiscal", he said.
The government earlier requested the World Bank to continue its budgetary support programme in the fiscals beyond 2006-07 as the donor's earlier development support credit (DSC) has been over.
The ERD official said: "Although the WB undertook a four-year lending plan (2006-2009) for Bangladesh with a proposed $300 million budgetary support each year in fiscals 2008 and 2009 after the DSC programme was over, the donor is now contemplating providing sectoral budgetary support on the basis of government's different public sector reforms initiative."
If such reforms attract funds from the global lender, it can provide another $200 million budgetary resource support for other sectors in this fiscal, he added.
Earlier, the World Bank provided support to Bangladesh's national budget from fiscal year 2002-2003 to fiscal 2006-2007 with $900 million credit in the form of DSC.
The IDA released the DSC fund in four instalments. The country received $300 million in fiscal 2002-03, $200 million in fiscal 2003-04, $200 million in fiscal 2004-05 and $200 million in fiscal 2006-07.
A World Bank (WB) mission will arrive in Dhaka on September 10 for holding talks with the government on a proposed US$100 million transitional budgetary support to Bangladesh.
The WB fund, if provided, will help the government minimise deficit financing in the current fiscal and continue its reforms in the country's power sector, official sources said.
A senior Economic Relations Division (ERD) official told the FE that the mission would review Bangladesh's power sector reforms and prepare further action plans for the proposed $100 million loan during its stay in Dhaka from September 10 to 19, they said.
The WB mission is coming to Dhaka in response to the caretaker government's request for the budgetary support.
The government took up a Tk 871.37 billion national budget for fiscal 2007-08 with an overall deficit of Tk 298.36 billion, which is 5.6 per cent of the gross domestic product (GDP). The budget deficit was 3.3 per cent of the GDP in fiscal 2006-07.
The ERD official expressed the hope that following the visit by the World Bank mission, the Division would be able to complete the negotiations for the $100 million power sector budgetary support credit by November next.
"If the negotiation is completed by November, the Bank might disburse the $100 million credit in December this year. The amount will strengthen the budgetary resources position for the current fiscal", he said.
The government earlier requested the World Bank to continue its budgetary support programme in the fiscals beyond 2006-07 as the donor's earlier development support credit (DSC) has been over.
The ERD official said: "Although the WB undertook a four-year lending plan (2006-2009) for Bangladesh with a proposed $300 million budgetary support each year in fiscals 2008 and 2009 after the DSC programme was over, the donor is now contemplating providing sectoral budgetary support on the basis of government's different public sector reforms initiative."
If such reforms attract funds from the global lender, it can provide another $200 million budgetary resource support for other sectors in this fiscal, he added.
Earlier, the World Bank provided support to Bangladesh's national budget from fiscal year 2002-2003 to fiscal 2006-2007 with $900 million credit in the form of DSC.
The IDA released the DSC fund in four instalments. The country received $300 million in fiscal 2002-03, $200 million in fiscal 2003-04, $200 million in fiscal 2004-05 and $200 million in fiscal 2006-07.