Published: Thursday, April 4, 2013

Economy hit hard

IMF warns against political instability

The ongoing political instability is affecting the economic activities in Bangladesh, said a mission from the International Monetary Fund (IMF) yesterday.
As a result, the growth of gross domestic product is “expected to moderate to below 6 percent in fiscal year 2013”, said the mission in a statement.
The mission came to Dhaka on March 20 on a 14-day visit to hold discussions on the second review under a three-year Extended Credit Facility (ECF) arrangement.
The executive board of the IMF approved the ECF arrangement in April last year for a total amount of $ 1 billion.
“To safeguard growth performance and consolidate macro-economic stability gains, the [Bangladeshi] authorities reaffirmed their commitment to undertaking prudent policies and building external buffers,” the delegation said.
The government should also advance structural reforms aimed at expanding tax revenues, improving public financial management and ensuring a stable, well-governed financial system, the IMF noted.
The delegation appreciated that economic developments have broadly lived up to expectations despite global uncertainties.
Exports are picking up, remittances remain high, reserves continue to rise and inflation pressures have eased with the aid of restrained fiscal and monetary policies, it observed.
“Quantitative targets under the ECF arrangement are broadly on track, with all performance criteria met at end-December 2012, except the ceiling on non-concessional external debt…,” the IMF said.
David Cowen, the outgoing mission chief visiting Bangladesh, and Rodrigo Cubero, the incoming mission chief, made the statement on conclusion of the visit.