With the world economy struck by the economic crisis brought on by the Covid-19 pandemic, the Bangladeshi economic engine has shown itself to be rather resilient in facing down the crisis and keeping the wheels of the economy turning.
While formulating the budget for the 2020-21 fiscal the government was in a quandary regarding the sources of financing for implementing the budget because of the potential stagnation or even recession the economy could have faced during the Covid-19 pandemic.
But in reality, the government was able to avoid any notably tough challenges during the first quarter of the fiscal year (July to September) while the second quarter became gradually more comfortable.
The overall situation of the government in terms of money supply and source of money is comfortable for the government.
According to the statistics from the National Board of Revenue (NBR) and Bangladesh Bank, the government did not fall into a fund crisis in the first quarter (July-September) as the revenue growth was 4.11% in the stipulated time.
Besides, the expense for interest payment was significantly lower due to the idle liquidity in the money market.
In the current account balance of the government, the trend for running surpluses returned.
On the other hand, the reserve for the foreign currency already passed the USD 44 billion-landmark.
Finance Minister AHM Mustafa Kamal recently in a programme said that the government had fixed the target to touch the USD 42 billion by end of this year, but the target was achieved much earlier.
"We have another target to make the foreign reserve USD 50 billion by 2030 and we hope that we will be able to do that," he told the programme.
According to the NBR, the revenue collection for the July-September period was 499.89 billion taka, which is 4.11% higher than the same period of the previous fiscal.
The revenue collection in the July-September period of 2019-20 fiscal was 480.17 billion taka. To meet the budget deficit in the 2019-20 fiscal's first quarter, the government had to borrow 271.15 billion taka from the banking sector while the amount of total borrowing, from the banking sector, savings certificates and foreign loans was 377.51 billion taka.
In the first quarter of the current fiscal, the government borrowed 88.50 billion taka from the banking sector while the amount of total borrowing, from the banking sector, savings certificates and foreign loans was 317.29 billion taka.
In the first quarter of 2019-20 fiscal, the selling of savings certificates was 46.98 billion taka while the amount in the same period of 2020-21 fiscal was 116.62 billion taka. The target of the government to borrow from savings certificate is 200 billion taka in the running fiscal.
On the other hand, the government is getting the benefit of excessive idle liquidity of 1700 billion taka in the banking sector, which resulted in lower interest rates for government borrowing from this sector.
In September 2019, the balance of the government in the current account was 0.71 billion in deficit, but a year later it was 3.53 billion taka in surplus.
In the balance of payment, it was a deficit of 0.20 billion taka in September 2019 while it is 3.09 billion taka surplus in the same period of 2020.
In the first quarter of 2019-20 fiscal, the government got loans of 500 billion taka from foreign sources, while it is 89.49 billion in the current fiscal.
The size of the budget in the running fiscal has been fixed at 5,680 billion taka where the estimation for the revenue collection is 3780 billion taka. Of the amount 3300 billion taka will come from NBR, 150 billion taka will come from the non-NBR source and 330 billion taka will be collected from non-tax revenue sources.
The total budget deficit of the running fiscal has been fixed at 1900 billion taka. To fill this deficit 800.17 billion taka will come from foreign sources while 1099.83 billion will come from internal sources. Of the internal sources 849.83 billion taka will come from the banking sector and 250 billion taka will come from savings certificates and the non-banking sector.
