ERD meetings with donors begin April

The Economic Relations Division (ERD) will start a series of meetings with donor agencies next month for the quick release of over $1 billion in budget support in the current fiscal year.

“We will hold meetings with the lenders who assured us of providing support,” a senior official of the ERD told The Business Post.

He said the meeting dates had not yet been finalised.

“This fiscal year will end in three months. We are expecting to get the budget support from them by the end of FY23,” he also said.

“We will continuously negotiate with the Japan International Cooperation Agency (JICA) so that they release by this fiscal year the $500 million budget support that they assured,” the official added.

Amid the Covid-19 pandemic and the on-going Russia-Ukraine war, Bangladesh sought loans and budget support from donors to tackle the prevailing economic crisis.

The International Monetary Fund (IMF) has already approved a $4.7 billion loan package to help Bangladesh recover from the crisis. The loan will come in instalments.

“The budget support from the donors is waiting for approvals from their boards. After that, we will sign the loan agreements,” the ERD official said.

Bangladesh expects $1-1.5 billion in budget support from several international lenders, especially the World Bank (WB), the Asian Development Bank (ADB), and the Asian Infrastructure Investment Bank (AIIB), in this fiscal year. It needs the money to tackle budget deficits in FY23.

The WB has committed $250 million in budget support while the amount is $500 million for JICA, $250 million for AIIB, and $500 million for ADB.

The WB support will come under the Green, Resilient, Inclusive Development (GRID) programme. The global lender will provide a total of $750 million in budget support in three instalments in three years.

The government requested the WB to approve two instalments amounting to $500 million together to mitigate the budget deficits in this fiscal year.

“AIIB has responded to Bangladesh’s request for budget support to help tackle the economic crisis. It has already signed an agreement with the ERD to provide $250 million while Bangladesh expects $500 million,” the ERD official said, adding the remaining $250 million will come after approval from the AIIB board.

In the last three financial years, Bangladesh received $800 million from AIIB in budget support to combat Covid-19, create the government-declared stimulus packages, and strengthen the post-pandemic economy.