Dhaka – Bangladeshi Prime Minister Sheikh Hasina on Sunday announced a bailout package worth about 72,750 crore taka (more than 8.5 billion dollars) to get over the economic shock out of the global Covid-19 pandemic.
The announcement came on the 11th day of the shutdown that the government announced to slow the spread of the novel coronavirus through social and physical distancing.
The shutdown hit hard the industries, service sector and the safety net as hundreds of millions of people are confined at their homes amid a nationwide transport restriction.
Unveiling her plan through a televised speech, Hasina said the economy will rebound if the packages are implemented immediately. She also warned that tougher measures would be taken if the packages are mishandled.
The amount is worth about the country’s 2.52 per cent of the gross domestic product, she said adding that her government simultaneously took up the plan to be implemented in phases – immediate, short and long-term.
Increasing public expenditure, formulating a stimulus package, widening social safety net coverage and increasing monetary supply are the categories she announced under the package.
Of the packages 30,000 crore taka will be provided to the affected industries and service sector as working capital through banks with a lower-interest loan.
The commercial banks would provide the amount as loans from their own funds to the industries and enterprises on the basis of bank-client relations, she said adding that half of the 9 per cent interest will be paid by the government as subsidy.
The allocation for medium and medium enterprises is 20,000 crore taka, to be used as working capital, she said. The SMEs will be given a further lower rate of interest. They will pay 4 per cent of the interest while the rest five per cent will be borne by the government,
Under the fourth package, she said, was meant for enhancing Bangladesh Bank’s Export Development Fund size to 5 billion dollars from exiting 3.5 billion dollars for raw materials imports under back-to-back LC.
The businesses will be allowed a 2 per cent interest rate instead of the existing 2.73 per cent.
The prime minister said under the fourth package, the central bank will introduce a new credit facility of 5,000 crore taka as “Pre-shipment Credit Refinance Scheme” and its interest would be 7 percent.
She said local products alongside the export sector would deserve special attentions and supports to cope with the possible global and domestic economic crisis caused by the pandemic.
“I call upon all to boost local production and raise their use,” she said adding that the country’s GDP growth may be stunted due to the coronavirus outbreak.
The government will extend funds to combat the impact caused by the coronavirus situation, she added.