IMF projects GDP to grow below 6.0pc

FE Report | Published: April 09, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

The International Monetary Fund (IMF) has projected Bangladesh's Gross Domestic Product (GDP) to grow below 6.0 per cent this fiscal due to impact of political unrest and uncertainty during and after the last January 5 national election.
"Imports, remittances, tax collections, and credit growth have all slowed. Inflation has edged up, largely due to food supply disruptions," said Rodrigo Cubero, head of IMF 4th Review mission for Extended Credit Facility (ECF) in Bangladesh.
The mission visited Dhaka from March 19 to April 2 this year to conduct the fourth review under the three-year ECF arrangement under which Bangladesh would receive US$ 985.66 million.
The mission chief in his statement said Bangladesh is expected to receive the 5th tranche of $140.5 million credit from total $985.66 million ECF next month.
Earlier, the IMF disbursed nearly US$561.4 million credit from the committed US$985.66 million ECF.
IMF Bangladesh mission chief Rodrigo said exports, however, have proved resilient, helped by Bangladesh's growing share of the global textile market.
If political stability continues and uncertainty abates, the GDP growth should rise above 6.0 per cent in FY15, he said.
Mr Rodrigo said: "Throughout the recent turbulent period, macro-economic policies have been sound, the government's economic programme remains on track, and there has been good progress in structural reforms."
As a result, the mission and the authorities have been able to reach an agreement on the quantitative targets and policies needed to complete the fourth review under the ECF arrangement, he added.
"This agreement is subject to review by the management and the Executive Board of the IMF. Upon the Executive Board's completion of this review, which is expected in May 2014, about US$140.5 million would be made available to Bangladesh," the mission chief said.
The mission members met the Minister of Finance, the Minister of Planning, the Finance Secretary, the Banking Secretary, the Bangladesh Bank Governor, other senior officials and development partners.
At the conclusion of the visit, Mr. Cubero said the Bangladesh authorities are committed to maintaining fiscal prudence in FY14 and FY15.
"To support this goal, the government will be taking further steps to reduce tax exemptions, strengthen tax administration, and implement the new value added tax (VAT). On the expenditure side, public spending on programmes and projects with high social returns will continue to be prioritised," the report said.
The IMF statement said Bangladesh will formulate a comprehensive debt management strategy, continue strengthening governance and balance sheets of the state-owned commercial banks through strict enforcement of policies and streamline customs procedures and foreign exchange regulations.
"In addition, the government, in coordination with development partners, the business community, the labour unions, and the international buyers, is taking important steps to improve the working conditions and strengthen safety standards for garment workers in Bangladesh. These will be critical to ensuring strong, sustained and inclusive growth," the IMF statement said.