World Bank assesses economy ahead of budget support

Personal correspondent: The World Bank assesses the state of Bangladesh’s economy before granting budget support. As part of this, a delegation from the World Bank met yesterday with the Minister of State for Planning Shamsul Alam. It was led by Matthew Varghese, the organization’s regional director for South Asia. At the end of the meeting, the Foreign Minister informed the journalists. Shamsul Alam

In a briefing in the meeting room of the Ministry of Planning in Shere Bangla Nagar of the capital, the minister of state said the World Bank wanted to know several things before releasing the promised $250 million budget support. These include the country’s macroeconomics, reserve status, inflation, VAT law reform, progress in turning CPTU into public procurement authority, slow pace of project implementation, etc. In response to these World Bank questions, the state minister said: ‘Our BJAR has fallen from 48 billion. This is a challenge. But our exports are growing by 25 percent. Imports are growing by 23 percent. In this case, the growth of exports is better than that of imports. In addition, monthly foreign revenues of two billion dollars come in. As a result, the reserves will be strong again.’

On inflation, the Foreign Secretary told World Bank representatives: “Our inflation has not increased as much as it should have. Food prices have not risen much compared to the international situation. I have taken many steps to reduce inflation.

When asked about the reason for the large reduction in reserves, the minister of state told the World Bank delegation: ‘Our imports have increased significantly in recent years. This caused a huge current account deficit. To reduce this shortfall in foreign transactions, additional money must be spent from the reserve. As a result, the reserves have decreased. However, since the beginning of the current fiscal year, initiatives have been taken to reduce imports. The resulting enormous current account deficit is gradually decreasing.

The state minister stated that reserves will be strengthened soon and said: ‘The flow of remittances through formal channels is good. Every month we receive remittances of about two billion dollars. Never raised $2 billion. Moreover, the growth of exports is better than that of imports. We are moving towards easing macroeconomic management.’

He also said that we left the exchange rate to the market. The currency market will also stabilize. Not a single productive sector of the country was disrupted. Agriculture and industry produce the same amount. The production system is fine. The entire economy of the country is under our control. These issues have been brought to the attention of the World Bank delegation.

Referring to the slowness in the implementation of government development projects, he said efforts are being made to increase the speed of all projects in the country, including mega-projects. The World Bank asked about project management initiatives in the budget. They emphasized cost reduction and the timely execution of projects. We are working on it. In this regard, the EGP system plays an important role. According to calculations by the World Bank, the implementation of the EGP will save a billion dollars a year in the implementation of the project.

The representatives of the World Bank want to know what steps Bangladesh has taken to achieve green growth. In this regard, the state minister told them that from now on Bangladesh will focus on green growth. That is why the Delta Plan is being implemented. Apart from this, the World Bank has advised on the reform of VAT and tax laws and the strengthening of several reform programs to make macroeconomic management more efficient.

Earlier in July, the government had requested $1 billion in budget support from the World Bank. The government then had a meeting with the World Bank delegation. To that end, the World Bank’s South Asian regional director yesterday discussed the country’s economic situation with the planning minister.

The meeting was attended by Planning Secretary Mamun Al Rashid, Member (Secretary) of the General Department of Economy (GED) of the Planning Committee. Kawsar Ahmed and others.

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