An International Monetary Fund mission is set to arrive in Dhaka on Wednesday to see if the government has full-filled the conditions of released fifth instalment of the Extended Credit Facility (ECF) programme.
The team will stay till 10th March and hold meetings with different authorities of the government.
They will discuss implementation of new VAT law, which was supposed to be effective from July this year under a major condition.
The release of final two instalments depend on the meeting of the conditions set with the release of fifth tranche.
IMF Resident Representative Stella Kaendera recently sent a letter to the Governor of Bangladesh Bank Atiur Rahman informing about the coming visit of the IMF mission.
The letter also sought to know the updates on the country’s different economic issues. The queries were made to Finance Division, Bangladesh Bank, Bank and Financial Institutions Division, Bangladesh Bureau of Statistics and Economic Relations Division.
“IMF mission will visit Dhaka on February 25-10 March and meet government authorities, private sector participants and academics. They will discuss a number of important issues about Bangladesh economy affected by the blockade and hartals,” said a bank division official.
The mission would focus on discussing near-term risks including the ongoing political crisis in Bangladesh and the image of Bangladesh where the Bangladesh currency may be depreciated significantly, he added.
The mission would also seek to assess their impact on Bangladesh economy and policy options to mitigate these risks, the official said.
The value added tax automation system was supposed to be implemented from July this year.
But the government has already canceled tender for VAT automation works over allegations of irregularity in the process, raising the concern about the launch in due time, according to the Finance Division sources.
IMF wanted to know about price adjustments, if any, on fuel, electricity and fertiliser in fiscal year 2014-2015.
It also sought information about estimated price hike to reach break-even price levels of these products.
Answers to the IMF queries would have to be communicated with IMF local office by February 23 (today).
Bangladesh Power Development Board said it has more liabilities than assets now as the electricity prices have not been raised.
As per the BPDB, the diesel and furnace oil accounted for more than 18% of the total electricity generated in last fiscal year. It cost Tk27.91 and Tk17.06 to produce each unit of power from diesel and furnace oil respectively.
In FY2013-14, the generation of a unit electricity by gas cost Tk2.50, by coal Tk6.22 and hydro-power Tk1.43.
India sold each unit of the 470MW of electricity at Tk5.06.
According to the latest data from the Finance Division, the amount of power subsidy paid during the first seven months is Tk3,804 crore.
As per the data, from the total allocation of Tk2,850 crore, Tk2,626 crore worth of incentives had been given to export and jute goods during the July-January period.
Of this amount, export sector received Tk2,213 crore, while the jute goods sector received Tk413 crore.
From the total allocation of Tk9,000 crore meant for fertiliser traders and farmers, the agricultural ministry received Tk2,804 crore subsidy during the seven months.
In the July-January period, around Tk9,834 crore of subsidies and incentives was spent for the sectors including oil, agriculture, power, jute goods and export.
