Now that Bangladesh has graduated to the status of middle income country, the cost of new loans will be higher, a high official of the World Bank has said.
World Bank’s Senior Vice-President for Operations, Kyle Peters, made the remark while talking to reporters after a meeting with Finance Minister AMA Muhith in Dhaka yesterday.
He also said that the rate of interest for Bangladesh against loans from the WB will rise from the existing 0.75%; the existing 40-year grace period will also be lower now because of the improve in status.
Finance Minister Muhith told reporters that the rate of interest against loans from the global lender would not rise until 2018; Bangladesh will not United Nation’s permanent certification before that.
In June, a WB report – based on the Atlas method calculation – declared that Bangladesh had transitioned from a lower-income country to a lower middle income country, as the Bank using the Atlas method.
According to Bangladesh Bureau of Statistics, the country’s per capita income rose to $1,314 from $1,190 in 2014. WB’s estimation of the lower middle income bracket ranges from $1,046 to $4,125.
Kyle Peters arrived in Dhaka on Tuesday to enlarge the traditional partnership between Bangladesh and the WB.
Bangladesh is the largest recipient of support from the International Development Association, the global lenders’ fund for the poorest countries. In 2015, WB committed $1.9bn in new financing to progress Bangladesh’s development agenda. WB’s current IDA portfolio in Bangladesh stands at $8.3bn in 36 projects.
