October 6, 2013
IMF COMMUNICATIONS DEPARTMENT |
| Media Relations |
|---|
| E-mail: media@imf.org |
| Phone: 202-623-7100 |
An International Monetary Fund mission (IMF), led by Mr. Rodrigo Cubero, visited Dhaka during September 22-October 6 to hold discussions on the 2013 Article IV Consultation with Bangladesh1, and to conduct the third review under a three-year Extended Credit Facility (ECF) arrangement, 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, Finance Secretary, Banking Secretary, Bangladesh Bank Governor, other senior officials, as well as representatives of the business and banking sectors, labor unions, and international development partners. The mission wishes to thank the authorities for their excellent cooperation and warm hospitality during its stay in Dhaka.
At the conclusion of the visit, Mr. Cubero made the following statement:
“Substantial progress has been achieved in strengthening macroeconomic policies under the IMF-supported ECF arrangement, reflecting the authorities’ continued commitment to the implementation of their reform program. Bangladesh is now in a better position to withstand adverse shocks, with international reserve levels double the lows in late 2011 and inflation pressures easing, a result of prudent monetary and fiscal policies. Quantitative targets under the ECF arrangement are on track, with all performance criteria met at end-June 2013. There has also been significant progress in structural reforms. The new value-added tax (VAT) law has now moved into the implementation phase, while amendments to the Bank Companies Act (BCA) have strengthened the legal framework for banking system governance and supervision.
“However, unrest and political uncertainty in the run-up to elections are affecting economic activity by disrupting supply and curbing investment appetite, with real GDP growth now expected to moderate below 6 percent in the fiscal year 2014 (FY14; July 2013-June 2014). And, while the external position remains strong, exports and remittances have also slowed, posing downside risks to the outlook. Preserving strong policy anchors will prove essential to mitigate the impact of potential shocks on the economy.
“The mission and the authorities have reached staff-level agreement on the quantitative targets and policies for the completion of the third review under the ECF arrangement. Discussions and understandings centered on policies to safeguard achievements so far and put the economy on a sound footing for continued strong growth and poverty reduction:
“This staff-level agreement is subject to review by the management and Executive Board of the IMF. Upon the Executive Board’s completion of this review, which is expected in early December 2013, SDR 91.4 million (about US$140.5 million) would be made available to Bangladesh, bringing total disbursements under the arrangement to SDR 365.7 million (about US$562.3 million).”
1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities.
