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WB provides $250m budget-prop loan


Published : 18 Apr 2022 10:22 PM | Updated : 19 Apr 2022 02:08 PM

The World Bank provided $250 million loan to Bangladesh in budgetary support which will play a key role in sustaining the post Covid - 19 economic recovery and development momentum.

As part of its move, a loan agreement of $250 million under Development Policy Credit (DPC1) was signed between the Government of Bangladesh (GOB) and the World Bank (WB) on Monday, an Economic Relations Division (ERD) press release said.

Secretary of the Economic Relations Division, Ministry of Finance Fatima Yasmin, and Acting Country Director of World Bank, Dhaka Office Mohammad Anis signed the loan agreement on behalf of the GOB and the WB, respectively on Monday.

The Bangladesh First Recovery and Resilience Development Policy Credit, the first of two credit programmes, supports fiscal and financial sector policies to enhance macroeconomic stability and sustain growth.

The DPC series will provide $500 million in two consecutive Fiscal Years 2021-22 and 2022-23.

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

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

The main objectives of the DPC1 are to assist Bangladesh in its efforts to implement budget stimulus for the subsequent recovery from 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 above mentioned loan is 1.25 percent, and the service charge will be 0.75 percent, and this loan has to be repaid in 30 (thirty) years with a grace period of 5 (Five) years.

For FY23, the finance ministry will formulate a budget to the tune of a little over Tk 683,432 crore, which is 13 percent higher than this fiscal year's main budget and 15 percent higher than the revised outlay, according to the finance ministry's official document.

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