The International Monetary Fund (IMF) says that Bangladesh still has one of the fastest-growing economies in the Asia-Pacific region, but it faces challenges.
IMF Mission Chief Rahul Anand said in a statement on May 7 that persistent inflationary pressures, elevated volatility of global financial conditions, and a slowdown in major advanced trading partners continue to weigh on growth, foreign currency reserves, and the taka.
The Washington-based lender presented the evaluation at the conclusion of the April 25 visit to Dhaka, led by Anand, reported bdnews24.
The group met with high-ranking representatives of the money service, Bangladesh Bank, and the energy service to talk about late macroeconomic turns of events and the execution of the Asset upheld program.
During the visit, they talked about recent developments in the financial sector and macroeconomics. “We also reviewed the progress made toward meeting key commitments under the Fund-supported program,” Anand was quoted saying by bdnews24.
The first review of the $4.7 billion loan it approved in January for Bangladesh and the Extended Credit Facility and Resilience and Sustainability Facility arrangements will formally evaluate this. This year, the review is expected to be conducted.
According to the IMF, the team met with Finance Secretary Fatima Yasmin, Governor Abdur Rouf Talukder of the Bangladesh Bank, other senior government and Bangladesh Bank officials, private sector representatives, bilateral donors, and development partners.
“We would like to express our gratitude to the authorities for their sincere discussions and warm hospitality. We anticipate continuing our support of Bangladesh and its people,” he said.
The Bangladesh Bank believes that the upcoming general election will worsen the difficulties facing the economy, such as recovering from the pandemic, inflationary pressure, and the war between Russia and Ukraine.
Its spokesperson, Mezbaul Haque, stated at a press conference on the same day that economic activity slows down during elections because everyone is preoccupied with voting.
“It’s true that these are areas where we face difficulties. We think we have enough time to deal with these problems,” he said.
The national bank likewise accepts a disappointment in the suitable execution of the IMF’s advance program, including an adequate number of stores to cover import bills of no less than 90 days, which won’t impede accomplishing the second portion of the credit.
The country was paying $8 billion per month for imports prior to the government’s restriction to replenish depleted foreign currency reserves. As a result, it requires $24 billion for three months’ worth of imports.
If the dollar holds are counted following the IMF-recommended technique, they might fall beneath the $24 billion imprint in June.
Bangladesh had $29.8 billion in reserves as of May 7 after paying $1.1 billion in import bills to the Asian Clearing Union.
According to Mezbaul, the country has no other significant payments to make before June, and the next month’s installments from loans approved by the World Bank and the Japan International Cooperation Agency are anticipated.
The spokesperson for the central bank anticipates that these factors will somewhat boost the reserves.
He claimed it was not fair that they would not receive the subsequent installment of the IMF loan if all conditions were not satisfied. However, they can still achieve the program’s goals at the stipulated time or later because we are still on the right path.
Mezbaul stated that the Bangladesh Bank was also investigating geopolitical obstacles. We are making import and macroeconomic policies to address these issues.