WB to provide $250m in budget support to Bangladesh

The World Bank will provide $250 million in budget support to Bangladesh to sustain post-Covid growth and enhance resilience to future shocks.

The budget support will be provided under the ‘Bangladesh-First Recovery and Resilience Development Policy Credit (DPCI)’, the Ministry of Finance said in a press release.

The Economic Relations Division (ERD) of the ministry and the international lending agency on Monday signed a loan agreement in this regard.

Fatima Yasmin, secretary to the ERD, and Mohammad Anis, acting country director of the World Bank, Dhaka Office, signed the agreement on behalf of the respective sides.

In response to the adverse effects of Covid-19, the Bangladesh government has provided stimulus incentives to economically affected industries, agriculture sector and export-oriented industries, read the release.

To ensure food security, the government extended the social safety net programmes and employment creation.

The DPC series will provide $500 million in two consecutive fiscal years 2021-22 and 2022-23. The main objectives of the DPCI are to assist Bangladesh in its efforts to implement budget stimulus for the subsequent recovery of Covid-19 and to enhance resilience to future shocks.

There are two sectoral focuses — fiscal and financial, and lives and livelihood for a resilient economy.

The interest rate of the loan is 1.25 per cent with the service charge at the rate of 0.75 per cent. The loan has to be repaid in 30 years with a grace period of five years.