A visiting International Monetary Fund (IMF) delegation queried the reasons behind the surge in non-performing loans (NPLs) in the banking system of Bangladesh. The query was made at a meeting with senior officials of the Bangladesh Bank (BB) Monday, according to the central bank officials. Their inquisitiveness was spurred by reports of NPL amounts having risen by more than 23 per cent or Tk 120 billion in the first half (H1) of the current calendar year. The volume of NPLs rose to Tk 633.65 billion, as on June 30 last, from Tk 513.71 billion in December 2015. It was Tk 525.19 billion a year before. The volume of classified loans kept rising in the recent years following the tightening of classified-loan policy and large-scale financial irregularities in different commercial banks, the central bankers were learnt to have explained at the meeting.
The government is once again considering cutting fuel prices in line with the international market so that the economy can benefit from it. The issue was discussed at a meeting, chaired by Finance Minister AMA Muhith, of the fiscal coordination council yesterday at the secretariat. At the meeting, the energy ministry has been asked to send a proposal to the finance ministry about the fuel price cut. The meeting discussed the price cut but the decision in this regard will be taken later, according to a finance ministry official. Oil fell to its lowest in three months yesterday, as the prospect of another year of oversupply and weak prices overshadowed chances that Opec will reach a deal to cut output. Brent crude futures fell 50 cents on the day to USD 44.3 a barrel.
The next national budget will be around BDT 3.9 trillion to support increased economic activities, Finance Minister AMA Muhith said Monday with forethoughts on more public-welfare spending. The current fiscal’s budget is BDT 3.41 trillion. Mr Muhith said country’s overall macroeconomic situation is in a positive mode with revenue collection as per target, increased spending on annual development program, and high investment. The minister, however, made it clear that subsidy in agriculture sector will continue to be given. He said the performance of revenue collection this year was as per target-better than last year’s in a substantial manner. Last year the collection was 11 % high compared to previous year-and this year it will also increase.
Income-tax collection for government exchequer in the first quarter of the current fiscal year (FY) fell short of an even curtailed target by BDT 12.4 billon. Officials attributed the shortfall largely to a deficit in receipts from corporate businesses. The income-tax wing of the National Board of Revenue (NBR) collected BDT 106.9 billion in the July-September period against its target of BDT 119.3 billion. However, income-tax collection posted a 12.4% growth in the first three months of the current fiscal year compared to that of the same period in previous fiscal. Official data show large taxpayers unit (LTU) alone counted a BDT 7.6 billion shortfall against its set target, triggering the aggregate deficit handed to the income-tax wing of the revenue board.
Reforms can make Bangladesh an export powerhouse: World Bank
Bangladesh can become an export powerhouse like its East Asian neighbors by improving its business competitiveness and trade regime, which will help firms compete globally, the World Bank said in a new report yesterday. Bangladesh is a wonderful case of how the rise in competitiveness can help cut poverty, said Vincent Palmade, lead economist for trade and competitiveness global practice at the WB, presenting the report at a program at Le Méridien in Dhaka yesterday. The repor, South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse — identified four policy levers that can help Bangladesh enable its firms to boost productivity and become more globally competitive. These include improving the business environment, connecting firms to global value chain, maximizing agglomeration benefits, and strengthening the firms’ capabilities.
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