The World Bank Tuesday approved 320 million U.S. dollars of credit for Bangladesh to help offset the budget deficit in the current fiscal year ending on June 30, a World Bank release said.
The release said the 200 million U.S. dollars Transitional Support Credit (TSC) is designed to help reduce pressure on the 2007-08 fiscal (from July 2007 to June 2008) budget, which is staggering under the weight of the adverse internal shocks that include the twin floods and cyclone Sidr in 2007 as well as the rising commodity prices, particularly oil, food, and fertilizer in the global markets.
The remaining 120 million U.S. dollars of Power Sector Development Policy Credit aims to enhance governance and accountability, and promote financial stability in the power sector, leading to better service delivery.
With approval of the credit, the World Bank's total concessionary lending to Bangladesh in 2007-08 fiscal was 683 million dollars as compared with 379 million dollars in 2006-2007 fiscal.
Zhu Xian, World Bank Country Director for Bangladesh, said extensive damage from successive floods followed by the devastating cyclone in 2007 and the unabated increases in global commodity prices have put the Bangladeshi economy under considerable strain.
He said the Transitional Support Credit will help the country's overall fiscal situation by reducing the pressure on the budget due to rising spending on oil and food.
Similarly, Zhu said the Bank's power support project will help strengthen governance in the power sector, which in turn will build a more robust investment climate, leading to economic growth and poverty reduction.
Of the total resources provided by the World Bank in 2007-08 fiscal, 495 million dollars including 175 million U.S. dollars earlier provided by the Bank was in the form of budget support.
Source: Xinhua
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