[{"bbox": [83, 105, 1149, 160], "category": "Text", "text": "objective of building adaptive capacities against climate change and strengthening resilience towards shocks by ensuring availability of adequate and scalable mechanisms to provide rapid responses."}, {"bbox": [83, 170, 1150, 411], "category": "Text", "text": "The NSSS presents a medium-term scenario to frame policy costing and financing in the period FY15-20. The mid-term budget framework for FY21-25 is under development as part of the NSSS Action Plan 2 (2021-2026). A first draft of the Action Plan was reviewed by the CMC in June and sent back to line Ministries for inputs. The final draft is expected in August. Over the last five years, budgetary allocation for social protection increased incrementally from 2.08% of GDP and 12.72% of expenditure in FY14/15 to a targeted 3.11% and 17.83% respectively in FY21/22³¹ (EUR 10.7 billion). Despite a steady increase in volume and share of the social safety net budget, its categorisation continues to include programmes that do not transfer purchasing power to people living in or close to poverty, with the challenge to prioritise those most in need. This is under discussion as part of recent the Public Expenditure Review on Social protection carried-out by the Word Bank in close collaboration with like-minded development partners."}, {"bbox": [83, 421, 1150, 848], "category": "Text", "text": "GoB responded proactively to the social and economic shock from the COVID-19 pandemic with a EUR 11.8 billion support package, which included cash transfer and food assistance for poor and vulnerable households and a stimulus package (with loans) to sustain employment in key sectors. The Social Safety Net (SSN) budget for FY20/21 is 17% higher than in the revised budget FY19/20 at EUR 9.45 billion. This represents 3.01% of GDP and 16.83% of expenditure. The proposed budget FY21/22 allocates EUR 10.7 billion, i.e. a 12% increase. This is progressive although allocative efficiency points to a considerable part of the budget allocated to Government pension (25%). In FY20/21 core social assistance programmes expanded to include an additional 1.1 million beneficiaries. Universal coverage is applied in 112 poorest Upazilas with the objective to reach 150 Upazilas in FY21/22. New programmes were also introduced to protect vulnerable populations (the “missing middle”): “urban poor”/informal workers (3.5 million households) and workers in the Ready-Made Garment (RMG)/leather/footwear sector at risk of losing their jobs. The latter represents the first GoB-funded social security programme for workers in the formal sector. It was established in a record-time at DoL and is operational. The system in place presents a solid basis to establish permanent and adequate social security mechanisms for workers. MoWCA is taking initial steps to consolidate two ongoing programmes for mothers and lactating mothers into one national child benefit programme with improved modalities and expanded coverage. Progress is also observed on transfer digitisation (G2P) to increase the efficiency of the payment system. A five-year NSSS Action Plan 2 is under development for the period 2021-2026."}, {"bbox": [83, 857, 1150, 914], "category": "Text", "text": "In conclusion, the policy is sufficiently relevant and credible for budget support contract objectives to be largely achieved. Therefore the policy can be supported by the Commission with the proposed budget support contract."}, {"bbox": [147, 934, 456, 964], "category": "Section-header", "text": "### 2.3.2. Macroeconomic Policy"}, {"bbox": [83, 984, 1149, 1544], "category": "Text", "text": "The overall macroeconomic performance of Bangladesh has remained strong over the last years (GDP growth rate over 7%), supported by strong export demand, high remittances, and stable inflation rate. After reaching 8.2% in FY18/19 (the highest in the region), GDP growth was projected to be around 7.4% in FY19/20, supported by both domestic and external demand. The impact of the COVID-19 pandemic severely affected the country, particularly with regard to the external sources of earnings (RMG exports and remittance inflows), which only recently have picked up. According to IMF, real GDP is estimated to have grown by 3.8% in FY19/20 and projection for FY20/21 is 5%. Overall inflation will remain moderate within the 5-6% range despite the pandemic-induced disruption to the global and domestic supply chains, and international reserves will be maintained at an adequate level (around 4.8 months of prospective imports) by allowing a gradual increase in the exchange rate flexibility. Prudent macroeconomic policies before the COVID-19 outbreak, in particular a relatively low level of public debt (below 40% of GDP), supported by the government's strong commitment to keep the fiscal deficit under control, provided the necessary room of manoeuvre for the immediate response and plan for a smooth economic recovery. The Bangladesh Bank took appropriate steps to ease liquidity conditions to allow the financial sector to support the economy. The budget deficit in FY20 was 5.5% of GDP, meeting the revised budget target but slightly exceeding the set ceiling of 5.0%. An increase of fiscal deficit to over 6% of GDP is projected in FY22. In the medium-term, the country's target to become a middle-income country by 2026 will bring additional challenges related to the loss of international support measures (ISMs). The current EU EBA market access regime will cease to exist by 2029 (three years after graduation from LDC status). The COVID-19 outbreak further underscored the urgency of strengthening domestic resources mobilisation and reforming the financial sector. The importance of well-selected public investment to facilitate growth and private sector's participation and the need to support tax administration reform to provide for additional fiscal space is also regularly highlighted."}, {"bbox": [72, 1637, 766, 1664], "category": "Footnote", "text": "³¹ Source: Social Safety Net budget, Finance Division, Ministry of Finance (online)"}, {"bbox": [1051, 1663, 1158, 1687], "category": "Page-footer", "text": "Page 9 of 27"}]