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Press Release: Bangladesh: Statement at the Conclusion of the IMF Mission on the Second Review Under the Extended Credit Facility Arrangement
April 2, 2013
An International Monetary Fund mission visited Dhaka March 20-April 2 to conduct discussions on the second review under a three-year Extended Credit Facility (ECF) arrangement. The ECF was approved on April 11, 2012 in a total amount equivalent to SDR 639.96 million (see Press Release No. 12/129). The mission met with the Minister of Finance, Bangladesh Bank Governor, Finance Secretary, and other senior officials, and development partners. The mission welcomed the authorities’ continued commitment to the implementation of their reform program, which is being supported by the ECF. It also wishes to thank them for the excellent cooperation and warm hospitality during the visit.
At the conclusion of the visit, Mr. David Cowen, the outgoing mission chief for Bangladesh, and Mr. Rodrigo Cubero, the incoming mission chief, made the following statement:
“Despite global uncertainties, economic developments have been broadly as envisaged. Exports are picking up, remittances remain strong, reserves continue to rise, and inflation pressures have eased, supported by restrained fiscal and monetary policies. Quantitative targets under the ECF arrangement are broadly on track, with all performance criteria met at end-December 2012, except the ceiling on nonconcessional external debt, as reported at the time of completion of the first ECF review. Progress continues to be made on structural measures, highlighted by a new VAT law now firmly moving in the implementation phase.
“However, unrest in recent months is affecting economic activity, with real GDP growth now expected to moderate to below 6 percent in fiscal year (FY) 2013 (July 2012-June 2013). To safeguard growth performance and consolidate macroeconomic stability gains, the authorities reaffirmed their commitment to undertaking prudent policies and building external buffers. They will also advance critical structural reforms aimed at expanding tax revenues, improving public financial management, and ensuring a stable, well-governed financial system.
“The mission and the Bangladesh authorities reached ad referendum understandings on a set of economic policies and reforms focused on:
“These staff level understandings are subject to review by the IMF’s management and its Executive Board in the context of the second review under the ECF arrangement. Upon the Executive Board’s completion of this review, which is expected by late May 2013, SDR 91.4 million (about US$137 million) would be made available to Bangladesh, bringing total disbursements under the arrangement to SDR 274.3 million (about US$412 million).”
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