Finance Minister Abul Hassan Mahmood Ali has said that there is nothing to be disappointed about the country's economy. He said this while talking to reporters after the Finance Ministry session at the  Deputy Commissioners' (DC) conference at Osmani Memorial Auditorium in the capital on Monday (March 4) at 12:15 pm. "Under the leadership of PM Sheikh Hasina, all the indicators of our country's development and economy are increasing. In February, on Sunday (March 3) Bangladesh saw the highest remittance inflow in the past eight months amounting to $2.16 billion. Responding to a question, Mahmood Ali said, "We are moving forward with Sheikh Hasina's Delta Plan 2100. You can see the development that has taken place in the country and instilled hope among the people of the country.  

In the current fiscal year, 24 ministries of the country have allocated Tk 35,000 crore to tackle climate change. The United Nations (UN) has assured that UN will provide substantial funding to Bangladesh through its various agencies to tackle climate change.  Environment, Forest and Climate Change Minister, Saber Hossain Chowdhury today (Feb 26) briefed reporters after a bilateral meeting with UN Resident Coordinator Gwyn Lewis at his residence in Paribagh in the capital. on Monday. The UN Resident Coordinator in Bangladesh Gwyn Lewis said that she had a discussion with the environment minister about how Bangladesh can get international funding to tackle climate change.

Finance Minister Abul Hasan Mahmud Ali has sought to allay concerns among the people by assuring them of an ample stock of all essential products required for the holy month of Ramadan. He warned against any attempts to manipulate prices during this crucial period, emphasizing that strict actions would be taken against those engaging in such practices. His warning came from an emergency inter-ministerial meeting held on Sunday (Jan 21) at the secretariat.   Addressing concerns about potential shortages, Minister Mahmud Ali stated that while the country has sufficient stocks of Ramadan-centric products, there are individuals and groups attempting to exploit the situation for their gain.   The finance minister stressed the government's commitment to dealing with any attempts at market manipulation and assured the public that necessary measures would be implemented.   During the meeting, he highlighted the government's proactive stance in addressing potential issues related to the supply and pricing of essential commodities during Ramadan.   The minister underscored that the government is closely monitoring the situation and would not hesitate to take strict actions if required.   Responding to queries about the dollar crisis, Minister Ali mentioned that initiatives have been undertaken to use multi-currency to tackle the issue. Bangladesh Bank Governor Abdur Rauf Talukder provided additional insights, noting that the Letters of Credit (LCs) for essential Ramadan products has seen a 15 percent increase compared to the previous year.    

The government has deferred its plans to issue a $1.5 billion international bond, Caretaker Finance Minister Shamshad Akhtar said on Thursday, stressing that the country will have to go for more IMF loan programmes for some time as the economy remains fragile. Her remarks came a day after the government reached a staff-level agreement with the International Monetary Fund on a nine-month bailout package. During a press briefing, Dr Akhtar outlined key aspects of the IMF agreement, affirming the government’s commitment to regular tariff adjustments, including a planned gas price hike in January to prevent the accumulation of circular debt in both the gas and power sectors. The electricity and gas rates would be “continuously revised” and their costs controlled besides transferring their management to the private sector as soon as possible and institutionalising ongoing campaign against power and gas theft, she said. She said Pakistan would also need to adhere to the market-determined exchange rate completely, remain responsive through adequate monetary policy adjustment, particularly to core inflation, and bring four more state-owned enterprises in line with the financing and governance template of the newly approved SOE law. These four state firms include the National Highway Authority (NHA), the Pakistan National Shipp¬ing Corporation (PNSC), the Pakistan Broadcasting Corporation (PBC), and the Pakistan Post.  Dr Akhtar also tried to allay concerns regarding the external financing gap, expressed confidence over the achievement of the tax collection target and said the government would remain committed to fiscal consolidation for macroeconomic stability and balanced growth. She said that unlike in the past, no prior action was required by the IMF management this time before approving the staff-level agreement, taking total releases under the $3bn programme to $1.9bn and leaving $1.1bn for the next and final review. Addressing the postponement of the new international bond, Dr Akhtar cited high interest rates and costly market conditions as key factors. “I have decided to postpone the new (international) bond. It is going to be expensive. Interest rates are very high. So, we cannot go to the international market,” she said, adding that the government would repay the $1bn bond that would be maturing in April next year. She said the government was working on some other avenues. In her view, the staff-level agreement would enable approvals of $1bn in loans from the World Bank ($350m), the Asian Development Bank ($350m) and the Asian Infrastructure Investment Bank (250m). Finance Secretary Imdadullah Bosal said these agreements were already “at an advanced stage” and were pending for the IMF’s staff-level agreement. He said negotiations with lenders for more funds under social protection, flood resilience and women’s inclusiveness programmes were also in the final stages. He, however, evaded the overall external financing needs, and the availability and gap for the current year, saying these were “dynamic numbers” despite budget allocations or announcements by the Economic Affairs Division. Mr Bosal said talks with some other commercial entities were also at an advanced stage to materialise $3.5bn projected commercial inflows. This would help launch a new international instrument — the Environment, Social and Governance (ESG) bond — rather than conventional bonds. He said the current account deficit would be lower than budgeted. Finance Minister Akhtar hoped to ensure a $2bn disbursement from the World Bank alone during the current fiscal year. “We are quite comfortable with external accounts,” she insisted, hoping that the IMF’s staff-level agreement, followed by disbursements from other multilaterals, would improve Pakistan’s credit rating. “The next [IMF] programme is very necessary for some time” as the economy had returned to stability that was still very fragile, the minister said. “Until we are able to increase exports and domestic resources, we will need another programme” because there was no more refuge from doing long-standing reforms. “The country will not survive without this,” she said. “Probably, we will have to go into another EFF [Extended Fund Facility]. We will remain engaged with the IMF,” she said but hastened to add that this may be premature to talk about. Dr Akhtar said her priority was to immediately start working on the last $1.1bn tranche under the current facility so that the new government should not face any difficulty, but “if we get time, we will also discuss this [new programme] as well. Responding to a question, she said the government would have to fast-track reforms in the SOEs to help improve business climate. There was no prior action, but laws governing the four SOEs — NHA, Pakistan Post, PBC and PNSC — have to be made compatible with the SOE law by Nov 30. Responding to another question, she said the government expected about Rs35bn in additional revenue through a windfall tax on banks on their massive foreign exchange earnings, “provided they pay” — an indication the government expected legal challenges from powerful banks. To another question, she said it had yet to be decided as to how much additional taxes would be imposed on retailers and real estate based on the expectation that the FBR would be able to deliver the Rs9.4 trillion revenue collection target. However, she agreed that the talks with the IMF also included trigger points to consider such options. Source: DAWN

The finance ministry on Wednesday forecast inflation to surge by 3-4 percentage points to 31 per cent in September compared to 27.4pc in the preceding month mainly because of a major increase in fuel prices. Inflation was likely to ease due to the double-digit base effect in September, but the significant rise in fuel prices offset it, said the Economic Advisors’ Wing of the Ministry of Finance in its monthly economic update & outlook for September. Together with this, the upward adjustment in energy tariffs is further likely to intensify inflationary pressures in the coming months as these price adjustments are expected to place an additional burden on transportation costs, essential items, and services, it further said. It is expected that inflation will remain in the range of 29pc to 31pc in September. Inflation has declined to 27.3pc in August, down from peak levels of 38pc in May. The State Bank of Pakistan forecasts inflation to decline sharply in 2024 due to the improved agricultural output, and administrative measures taken to curb volatility in the foreign exchange markets. SBP has projected 20-22pc average inflation for FY24 from 29.2pc in FY23. The report highlights a series of actions that the government has already taken and the declining international prices that would help to lower inflation in the coming months. The report claims that the government’s stern administrative measures to curtail the hoarding of commodities and a crackdown on illegal forex business have resulted in moderating the inflation pressure. However, given the international oil price pressure and adjustment in energy prices, uncertainty in inflation will remain. The government has launched an operation against illegal forex dealers and commodity hoarders, which has stabilised the exchange rate and reduced commodity prices. The SBP has left its policy rate unchanged at 22pc saying inflationary expectations are under control. The rupee depreciated by 45pc against the dollar since June 2022 reaching 295 in the interbank market and 304 in the open market in August. The weak rupee had fuelled the record-high inflation in the past year. To address this issue, the government has taken action against the exchange companies that were involved in speculative activities. On the other hand, international food prices have been experiencing a decline since August. The Food and Agriculture Organisation (FAO)’s price index, which tracks the most globally traded food commodities, averaged 121.4 points in August against 124.0 for the previous month. The August figure was the lowest since March 2021 and also 24pc below than an all-time high in March 2022, in the wake of Russia’s invasion of Ukraine. The decline in most of the food commodities is offsetting the increases in rice and sugar. According to the finance ministry, the main cause of inflation is the structural problems — public debt, energy circular debt and trade deficit. Corrective fiscal action must be taken on an urgent basis to reduce inflation. For FY24, significant enhancements in budget allocations for social safety nets have been made including cash transfers under BISP. The government is taking measures to curb inflation and is sparing the public from the full impact of the power and gas tariff hike. It has allocated Rs1 trillion for subsidies in FY24, the ministry said. Source: DAWN

Transporters in Khyber Pakhtunkhwa (KP) have issued a warning of a potential wheel-jam strike in protest against the recent spike in petroleum prices, a move that has been widely rejected by the business community, transporters, and political activists, Dawn reported. They have collectively called on the federal government to reverse the price hike that is  adversely impactin the inflation-affected population, burning a massive hole in their pocket. Transporters have expressed their readiness to unilaterally raise fares or initiate a wheel-jam strike if the government does not backtrack on the oil price increase. Khan Zaman Afridi, President of the Public Transport Owners Association Khyber Pakhtunkhwa, stated that they have scheduled a meeting of all transporter groups at the Haji Camp Bus Terminal on Monday, September 18, to make a decision regarding the strike or fare adjustments, according to Dawn. Afridi emphasized that the substantial increase of over Pakistan Rupee (PKR) 330 per litre in petroleum prices has exacerbated the hardships faced by both transporters and commuters. He stressed the need to raise a strong voice against what he termed as “injustice.” The transporters’ discontent extends across different unions, with approximately ten unions of various categories standing united against the government’s decision to hike oil prices, as reported by Dawn. Pakistan caretaker government on Friday announced another hike in the prices of petrol by Pakistani Rupees (PKR) 26.02 per litre and high-speed diesel by PKR 17.34 per litre. The rise in the rate brings the price of petrol to PKR 333.38 per litre and the rate of high-speed diesel is PKR 329.18 per litre. Pakistan’s Ministry of Finance announced the increase in the price of petrol and high-speed diesel, according to Dawn report. Furthermore, the Sarhad Chamber of Commerce and Industry (SCCI) has also voiced its opposition to the record rise in petroleum prices, viewing it as detrimental to the national economy, businesses, and industry. The acting president of SCCI, Ijaz Khan Afridi, stated that the unprecedented surge in petroleum product prices would unleash a new wave of inflation, adversely affecting both the business community and the general public. Afridi urged the caretaker government to reconsider the fuel price increase in the best interest of the economy, businesses, and industry. He warned that the SCCI, along with traders, would initiate a protest movement against the price hike. Criticising the government’s perceived “anti-business” policies, Afridi expressed disappointment in the caretaker government’s endorsement of measures that have exacerbated the challenges faced by traders. He questioned how the national economy could improve when the business community grappled with uncertainty, according to Dawn. The SCCI leader called for a comprehensive review of the government’s economic policies and urged consultations with chambers and other stakeholders to revive the struggling economy. He cautioned that the recent substantial increase in fuel prices would further burden businesses and industry amid rising electricity, gas, and raw material costs, increasing the overall cost of industrial production and businesses. Afridi noted that the inflation-affected business community and the public, who have already protested against inflated bills, would suffer even more due to the significant fuel price hike. He urged both civilian and military leadership to play a proactive role in steering the economy in the right direction, emphasizing that failure to do so would worsen the economic situation. Meanwhile, Dr Khalil Mehmood Khalid, a provincial leader of the Pakhtunkhwa Milli Awami Party, expressed resentment over the recurring increases in fuel prices and power tariffs. He called on the caretaker government to reverse these decisions, warning that if the hikes were not rolled back, the public would have no choice but to initiate street protests, Dawn reported.

Finance ministers and central banks' chiefs are discussing a wide range of topics, including the US debt standoff and preventing Russian sanction evasion. Measures to counter China were also reportedly being debated. Finance leaders of the Group of Seven (G7) are meeting on Friday, for the second day of a three-day summit in the coastal Japanese city of Niigata. The summit is setting the financial agenda for an anticipated meeting of the grouping's leaders in Hiroshima next week. What is on the agenda? On the agenda for Friday's talks are topics like support for Ukraine, global economic growth, inflation and the US standoff over raising its national debt ceiling. While China plays an important role in most of the issues, it was reportedly not listed as an official topic for the closed-door meetings.  However, some media reports said the finance ministers could debate, at least informally, possible investment controls against China. Another major topic that was set to dominate discussions was the domestic political standoff over the US debt ceiling and potential default. US Treasury Secretary Janet Yellen said that "a default is frankly unthinkable."  "America should never default. It would rank as a catastrophe," she told reporters ahead of the talks. Kazuo Ueda, Japan's central bank governor, said a US default "will become a big move and a big problem, and I think that the Fed alone, for example, may not be able to counteract it." Speaking on the sidelines of Friday's talks, German Finance Minister Christian Lindner told reporters he hopes that politicians in the US will make a "grown-up" decision on raising the debt ceiling, echoing concerns about an impact on the global economy. The financial leaders of the G7 advanced economies are also discussing measures to prevent Russia from evading sanctions imposed on Moscow over its war in Ukraine, Japanese Finance Minister Shunichi Suzuki told reporters. The US said the G7 "will stand with Ukraine for as long as it takes" to bring an end to the conflict. "We have taken a wave of actions in the past few months to crack down on evasion. And my team has traveled around the world to intensify this work," said Yellen. US seeking counter-China measures While the group's current chair, Japan, is seeking to diversify supply chains and reduce its heavy reliance on China, G7 countries have been seemingly wary of how far they could go in countering China. The US has pushed for stronger measures against Beijing. On Thursday, Yellen said many G7 members were concerned about China's use of "economic coercion" against other countries, and called for measures to counter such behavior. "We have been engaging in discussions with our G7 colleagues, and I would expect that that would continue these meetings, at least in some informal way," Yellen said on the US push to impose such curbs.

On Tuesday, December 27, Bangladesh Bank decided to dismiss the board of directors of the Uttara Finance and Investments over major financial irregularities involving Tk 5,100 crore it had unearthed two years ago.  The Bangladesh Bank officials who are working on the issue commented the central bank has already completed all official procedures to dissolve the board in order to protect the interests of depositors. Within a day or two, Bangladesh Bank will send a letter to implement the decision, they said. Last month the central bank sent a letter to the Bangladesh Securities and Exchange Commission (BSEC) requesting it to provide a list of independent directors such that it could appoint them to replace directors in the non-bank financial institution (NBFI). An official related to Bangladesh Bank said the Bangladesh Securities and Exchange Commission has a panel of independent directors and it had earlier designated some of them in boards of directors of NBFIs which it had dissolved. In addition, the Uttara Finance and Investments is a listed company, which is why the central bank sought suggestions and a list of independent directors for the NBFI. The official said the BSEC has already provided the names to the central bank. On June 23, Central bank removed SM Shamsul Arefin, the managing director of the Uttara Finance and Investments, for his alleged involvement in the financial irregularities. What Happened in Uttara Finance and Investments? The BB carried out a probe in 2020 where it found that irregularities involving Tk 5,100 crore were committed by the board and management of the NBFI. The irregularities were perpetrated during the disbursement of loans and mobilisation of deposits. The bulk of the loans was given to different concerns of the Uttara Group of Industries. The majority of directors of the group also hold directorship at the NBFI. Most of the amount was not even shown in the NBFI's financial statement made public in 2019. For instance, it provided Tk 336 crore in loans to Uttara Motors and other concerns of the Uttara Group of Industries without any credit proposals, breaching banking rules. The BB found that Mujibur Rahman, a director of the NBFI and deputy managing director of different concerns of the group, was the key person behind the financial scams. In August 2020, the lender provided vouchers of term-deposit receipts (TDRs) of Tk 236 crore to Bluechip Securities, the managing director of which is Mujibur. But the vouchers of the TDRs were forged. In reality, the firm did not deposit any money with the NBFI, said the BB report. The NBFI also concealed the actual amount of term deposits mobilised from clients. Its financial statement mentioned that the total amount of term deposits was Tk 1,877 crore as of December 2019. But the BB discovered that the actual amount was Tk 2,603.20 crore. The undisclosed funds of the term deposits to the tune of Tk 726 crore was diverted to other sectors as a part of its effort to help scamsters plunder the money, said the BB probe report. The lender also employed the same tactic in the calculation of the loans disbursed in its financial statement. For instance, the total amount of loans provided by the NBFI was Tk 1,877 crore till December 2019 as per its balance sheet. But the BB found that the actual amount was Tk 3,802 crore. Contacted by The Daily Star yesterday, Matiur Rahman, vice chairman of the NBFI, said the board has not received any directive yet from the central bank about disbanding. "Some officials, including former managing director SM Shamsul Arefin, were involved in siphoning off funds from the non-bank," he said. "The NBFI will file a case against the alleged persons soon," he said. No other board member was involved in any irregularities in the NBFI, he added.  Source: The Daily Star

India's economy is set to reach the targets set during the tabling of the Economic Survey, according to the Finance Ministry. The calculations are based on high-frequency indicators for the first quarter of this fiscal. Tabled in January 2022, the Economic Survey projected the real GDP during 2022-23 to grow at 8.0-8.5%. "Since then, sustained growth momentum has been observed in several High Frequency Indicators (HFIs), indicating that the projected growth path is on course in the first quarter of FY 2022-23," Minister of State for Finance Pankaj Chaudhary said in a written reply to Rajya Sabha. These projections are in line with the IMF's April 2022 projections, which puts India's real GDP growth at 8.2% in 2022-23.   To keep growth on track, the government has taken multiple measures, according to Chaudhary. Measures include a cut in excise duty on petrol and diesel and special excise duty/cess on the export of petrol, diesel and aviation turbine fuel. In addition, Chaudhary said that the RBI's move to hike the repo rate by 50 bps in June was aimed to rein in inflation and will help in keeping indicators on the right path.   Source: The Economic Times

India's services sector has witnessed a broad-based recovery in sales revenues in both nominal and real terms during the January-March 2022 quarter 2022, the Ministry of Finance said in its latest Monthly Economic Review report. The Information technology (IT) companies maintained strong growth while non-IT service companies continued to recover from the slump caused by the lockdown. A broad-based recovery in service activity continued in the first quarter of 2022-23, which can be attributed to improvements in demand following the retreat of pandemic restrictions, capacity expansion, and a favorable economic environment. Domestic freight movement data also signaled resilience, with railway freight continuing to expand in double-digits on a year-on-year basis in June 2022. "Hotels and tourism, trading, shipping transport services, information technology or software and films exhibition all witnessed a growth of over 20 per cent," the report said, adding that road, railway, shipping transport, and media content, however, experienced negative growth in real terms. On the other hand, the report raised concern about India's rising current account deficit. India's current account deficit, meaning a shortfall between the imports and exports, will deteriorate in 2022-23 on account of costlier imports and tepid exports, if recession concerns do not lead to a sustained and meaningful reduction in the prices of food and energy commodities. A sudden and sharp surge in gold imports amid wedding season, as many weddings were postponed to 2022 from 2021 due to pandemic-induced restrictions, is also now exerting pressure on the trade deficit, it said. The country's trade deficit widened to $45.18 billion in April-June 2022 period as compared to $5.61 billion recorded in the corresponding period of last year. In order to alleviate the impact, the government recently hiked the customs duty on gold from the present 10.75 per cent to 15.0 per cent. The widening of the current account deficit has depreciated the Indian rupee against the US dollar by 6 per cent since January of 2022 and is on the brink of touching the 80 mark. Depreciation in the rupee typically makes imported items costlier, which is already reflected in the country's foreign exchange reserves data. India's forex reserves during the six months in 2022 have declined by $34 billion.   Source: ANI