Bangladesh is likely to receive US$250 million budgetary support from the World Bank (WB), as the Washington-based lender might approve the assistance next week, officials said on Monday.
The WB board, in its upcoming meeting on June 19, might endorse second instalment of the Development Policy Credit (DPC), amounting to $250 million, for Bangladesh, they said.
After one and a half years, the government is set to receive instalment of the WB's $750-million DPC for Bangladesh amid severe impact of the deadly coronavirus pandemic on the national economy.
On January 9 last year, the WB confirmed first instalment of the assured DPC, amounting to $250 million, for Bangladesh. Its board endorsed the credit instalment on December 12, 2018.
According to the WB Dhaka office, the DPC-II, which is basically a budgetary support for Bangladesh, is expected to be placed in its executive board meeting in Washington DC on June 19.
"Upon approval, we expect disbursement of the $250 million budgetary support on an emergency basis to facilitate the national budget expenditure," said an official of the Economic Relations Division (ERD).
He said since the government is under pressure in terms of resources mobilisation for the national budget, the WB's DPC-II will give some respite to it.
Following the COVID-19 pandemic impact on the economy, Finance Minister A H M Mustafa Kamal requested the WB headquarters in a video conference on March 25 to extend its support, especially to disburse the budgetary support to tackle the situation.
Another official of the ERD told the FE that disbursement of the $250 million installment was getting delayed for last one year.
"As the coronavirus outbreak is ravaging the country's economy, the WB has considered our request, and it is going to disburse the funds soon."
"We are hopeful of getting the funds before the end day (June 30) of the current fiscal year (FY), 2019-20, as it will help bankrolling the budget deficit."
The official also said since the government needs more money for overcoming the pandemic impact on the economy, the WB funding will be very helpful in this regard.
If the money is confirmed, it will be directly injected into the national coffer. It will help to offset possible increased deficit of the public expenditure plan, he added.
In the Tk 5.23 trillion national budget for the current FY, the government kept aside Tk 1.45 trillion, 5.0 per cent of the GDP, as budget deficit. It planned that some Tk 680.16 billion will come from external sources, and Tk 773.63 billion from domestic sources for financing the gap.
The government is now facing drastic fall in revenue collection, export earnings, and remittance inflow. Some economists fear a burgeoning budget deficit as the pandemic aftermath, as the revenue, export and remittance shortfall has started to hit the economy hard.
The government has already announced massive financial support packages for businesses and others for tackling the coronavirus impact.
Meanwhile, the WB has recently approved $100 million funds for Bangladesh as fast-track response to support the country's ailing health facilities to combat the COVID-19 outbreak.
Besides, it has called Bangladesh for diverting unutilised funds from the less-necessary development projects to bankroll top priority works for tackling the coronavirus outbreak now, officials said.
The WB has commitments of providing nearly $13 billion funds for some 45 ongoing development projects in Bangladesh.
The Washington-based lender has recently announced that it will provide $160 billion funds in next 15 months for combatting the pandemic, and help the economies across the globe recover from the losses they face for it.
