IMF predicts lower growth for Bangladesh

International Monetary Fund (IMF) says political unrest and uncertainty surrounding the Jan 5 elections has taken a toll on Bangladesh’s economic growth.

As a result of this, it says, the real growth in this fiscal will be far below the government’s expectations.

In a statement after its mission’s recent Dhaka visit, IMF says they expect the GDP growth to be below 6 percent. Bangladesh’s central bank and the global lender World Bank also made similar projections.

The government has also revised its growth target to 6.5 percent from 7.2 percent due to political unrest.

IMF, however, says if the current political stability continues and uncertainty abates, growth should rise above 6 percent in the next fiscal.

Led by Rodrigo Cubero, the IMF mission completed its Dhaka visit on Apr 2 and issued the statement on Tuesday.

He, however, said during the recent turbulent period, “macroeconomic policies have been sound, the government’s economic programme remains on track, and there has been good progress on structural reforms”.

The IMF team conducted the “fourth review” under the three-year, $ 985.66 million Extended Credit Facility (ECF) arrangement for Bangladesh.

According to the statement, upon the Executive Board’s completion of this review, which is expected in May, about $140.5 million would be made available to Bangladesh for the next fiscal.

Cubero detailed the reason of its projected low GDP growth in the statement.

“Imports, remittances, tax collections, and credit growth have all slowed. Inflation has edged up, largely due to food supply disruptions”.

“Exports, however, have proven resilient, helped by Bangladesh’s growing share of the global textile market,” he said.

Its programmes with the upcoming $140.5 million funds would focus on “maintaining fiscal prudence, consolidating debt management, strengthening the financial sector, promoting growth and improving labour conditions”.

The mission met with the finance minister, planning minister, finance secretary, banking secretary, Bangladesh Bank governor, other senior officials, and development partners during their visit.