REJAUL KARIM BYRON

Bangladesh is expecting $3 billion in budget support by the middle of June from five multilateral and bilateral lenders, including the World Bank, in what would provide a sigh of relief to the government from the financial pressure triggered by the Middle East war.

About $1.2 billion is expected from the WB, $1 billion from the Asian Development Bank (ADB), $500 million from Japan International Cooperation Agency (JICA), $250 million from the Asian Infrastructure Investment Bank (AIIB) and $100 million from the OPEC Fund for International Development (OFID), The Daily Star has learnt from finance ministry officials involved with the proceedings.

The development comes after a government study estimated that an additional $4 billion is needed in emergency budget support between May and June to plug the unexpected higher outlay for fuel and fertiliser imports for the war.

Letters were sent to development partners earlier this month seeking assistance and all responded positively, finance ministry officials said on the condition of anonymity as they are not authorised to speak with media.

“As a strategy, I don’t see anything wrong with it,” said Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue.

He, however, cautioned that the borrowing terms -- particularly interest rates and repayment periods -- must be carefully considered to ensure debt servicing remains sustainable.

In the IMF’s latest debt sustainability analysis, Bangladesh’s outstanding debt has already moved from low risk to moderate risk.

Some of the planned loans appear relatively stringent in terms of interest rates, though the long repayment periods provide some Of As

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