A technical assistance mission of the International Monetary Fund (IMF) is set to arrive in Dhaka for a 15-day visit aimed at conducting a fiscal risk analysis, focusing on the macroeconomic risks in Bangladesh.
It will also assess Bangladesh's debt management strategies and analyse recent and expected trends in external non-concessional borrowing to determine the potential risks associated with government debts.
A Finance Division official engaged in the process clarified that the visit of the technical assistance mission is not connected to the terms of obtaining the $4.7 billion loan from the multilateral lender.
"This is a routine mission," the official told The Business Standard.
He mentioned that Bangladesh anticipates receiving the second tranche of the IMF loan in December. Prior to that, a review mission is scheduled to arrive on 4 October to assess the advancements in the implementation of the loan conditions.
While in Bangladesh during 6-19 September, the IMF officials will conduct a series of meetings with the finance ministry, the Prime Minister's Office, the Bangladesh Bank, and other ministries and departments.
They will also discuss Bangladesh's macroeconomic risk analysis and debt sustainability analysis, in addition to the risks identified within the microeconomic and fiscal outlook of the Medium-Term Macroeconomic Policy Statement.
The Finance Division has initiated preparations for the upcoming visit. On Monday, its macroeconomic wing sent letters to the relevant ministries, requesting the necessary information and support and urging them to designate a focal point officer.
During the first two days of the visit, the IMF delegation will engage in meetings with officials from different wings of the Finance Division. These discussions will focus on the legal and institutional framework for fiscal risk management as well as the state-owned enterprises' current situation.
Officials from the Finance Division mentioned that the IMF mission will request a significant amount of information concerning state-owned enterprises. This will include details about their governance structure, controls, and financial oversight mechanisms, public service obligations, financial assistance, and the historical performance of the enterprises in meeting debt service payment obligations.
They also noted that IMF officials will conduct an assessment to determine if any fiscal risks are emerging in Bangladesh due to public-private partnership (PPP) projects. The mission will evaluate both firm and contingent liabilities associated with PPP initiatives.
In addition, the IMF team will analyse the management of government guarantees and loans to state-owned enterprises. It will review the current stock of guarantees, beneficiaries, outstanding guarantees, servicing of guaranteed debt, and the target amount of guarantees in the next three financial years.
Besides, the mission will determine the risk by verifying the provision allocated in the budget for guaranteed debt servicing.
The IMF officials will also verify the information on debt, stock of debt, pricing, recovery, and projected debt service for the next three years of state-owned enterprises and other institutions of the government.
During the visit, the IMF will also analyse what kind of risks are being created in Bangladesh's macroeconomics and fiscal management due to natural disasters and climate change.
It will analyse the negative impact of natural disasters on the country's economy, the impact of natural disasters on revenue collection, and how much financial assistance the government has to provide from the budget to deal with disasters.