## IMF Executive Board Approves US$3.3 Billion Under the Extended Credit Facility/Extended Fund Facility and US$1.4 Billion Under the Resilience and Sustainability Facility for Bangladesh

_IMF News, January 30, 2023_

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**Canonical URL:** [IMF Executive Board Approves US$3.3 Billion Under the Extended Credit Facility/Extended Fund Facility and US$1.4 Billion Under the Resilience and Sustainability Facility for Bangladesh](https://www.imf.org/en/news/articles/2023/01/30/pr2325-bangladesh-imf-executive-board-approves-usd-ecf-eff-and-usd-under-rsf)

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## Bibliographic details
- Published: January 30, 2023

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### Financing approval and program design
- Executive Board approved ECF/EFF arrangements of SDR 2.5 billion (equivalent to 231.4 percent of quota or about US$3.3 billion).
- Concurrent RSF arrangement approved of SDR 1 billion (equivalent to 93.8 percent of quota or about US$1.4 billion).
- Approval enables immediate disbursement of SDR 352.35 million (about US$476 million).
- Program duration: 42-month arrangements.
- Bangladesh is the first country in Asia to receive financing under the RSF.

### Program objectives and reform priorities
- Program aims to:
  - Preserve macroeconomic stability and rebuild buffers.
  - Protect the vulnerable and prevent disruptive adjustments.
  - Foster inclusive and green growth.
- Reforms will focus on:
  - Creating fiscal space to enable greater social and developmental spending.
  - Strengthening the financial sector, including oversight, governance, and regulatory framework.
  - Modernizing policy frameworks and improving public finance, investment, and debt management.
  - Building climate resilience and catalyzing additional official and private finance via RSF.
  - Implementing a domestic revenue mobilization strategy relying on tax policy and revenue administration reforms.
  - Structural reforms to expand trade and foreign direct investment, deepen the financial sector, develop human capital, and improve governance to enhance the business climate.

### Economic context and rationale
- Recent shocks:
  - Bangladesh’s robust recovery from the pandemic was interrupted by Russia’s war in Ukraine, causing a sharp widening of the current account deficit, depreciation of the Taka, and a decline in foreign exchange reserves.
- RSF purpose:
  - Supplement ECF/EFF resources to expand fiscal space for climate investment priorities, strengthen institutions, and enhance climate-spending efficiency to build resilience and catalyze additional financing.
- Long-term goals:
  - Support Bangladesh’s aspiration to reach upper-middle income status by 2031 and meet the Sustainable and Development Goals (SDGs).

### Selected economic indicators (FY2019–27) — key series (as reported)
- Real GDP (FY19–FY27): 7.9, 3.4, 6.9, 7.2, 5.5, 6.5, 7.1, 7.3, 7.4
- Consumption — Private (FY19–FY27): 4.9, 3.0, 8.0, 13.2, 7.6, 4.1, 4.7, 5.7
- Gross Capital Formation (FY19–FY27): 8.6, 0.2, 8.1, 10.0, -6.2, 10.5, 12.4, 11.8, 10.9
- Exports of goods and services growth (selected years): 11.5, -17.5, 9.2, 23.2, -7.2, 8.9, 9.0
- Imports of goods and services growth (selected years): 0.5, -11.4, 15.3, 45.1, -22.6, 14.2, 5.1, 6.0
- GDP deflator (selected values): 3.7, 3.8, 5.0, 5.2, 4.8, 4.5, 5.4
- CPI inflation (annual average): 5.6
- CPI inflation (end of period): 5.9
- Central Government: Total revenue and grants (percent of GDP, selected years): 8.5, 9.4, 8.7, 8.8, 9.7, 10.3, 10.2
- Central Government: Total expenditure (percent of GDP, selected years): 13.6, 13.3, 13.0, 12.6, 14.5, 14.4, 14.8, 15.2
- Overall balance (including grants, percent of GDP, selected years): -5.4, -4.8, -3.6, -3.8, -5.6, -5.1, -5.0
- Public sector total debt (percent of GDP, FY19–FY27): 32.0, 34.5, 35.6, 39.0, 42.1, 42.2, 42.3, 42.5
- Of which: External debt (percent of GDP, FY19–FY26): 14.6, 15.1, 17.0, 18.9, 19.0, 18.6, 18.1, 17.3
- Current account balance (percent of GDP, FY19–FY26): -1.3, -1.5, -1.1, -4.1, -3.2, -4.2, -3.5
- Trade balance (percent of GDP, FY19–FY26): -6.4, -10.8, -7.6, -8.4, -6.7
- Transfers (percent of GDP, selected): 5.3, 4.2
- Of which: Remittances (percent of GDP, selected): 4.6, 4.4
- Financial account balance (percent of GDP, selected): 1.5, 2.3, 3.1, 2.5
- Foreign direct investment, net (percent of GDP, selected): 0.3, 1.0, 1.2, 1.3
- Gross international reserves (billions of U.S. dollars, FY19–FY26): 32.7, 36.0, 46.4, 33.4, 30.0, 34.2, 40.0, 53.1
- Reserves in months of next year's imports (selected): 3.5
- Broad money (M2) growth (selected years): 52.0, 53.8, 54.6, 52.8, 53.6, 54.2, 54.8, 55.4
- Credit to private sector (percent of GDP, selected): 37.2, 37.3, 36.2, 36.6, 36.7, 37.5, 37.9, 38.0, 38.7
- Gross national savings (percent of GDP, FY19–FY26): 31.1, 31.4, 30.8, 25.6, 27.8, 28.0, 30.2, 32.9
- Gross investment (percent of GDP, FY19–FY26): 32.2, 31.3, 31.0, 31.7, 33.7, 35.0, 35.8

### Key messages from IMF management (Ms. Antoinette M. Sayeh)
- Emphasized steady progress in reducing poverty and improving living standards since independence, noting setbacks from COVID-19 and Russia’s war in Ukraine.
- Stressed the need to accelerate an ambitious reform agenda, invest substantially in human capital and infrastructure, and tackle climate change risks to protect macroeconomic stability.
- Noted RSF will complement ECF/EFF reforms by improving climate investment potential, strengthening institutions, and catalyzing additional finance.

*Source: IMF Press Release No. 23/25, January 30, 2023.*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh](https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Bangladesh and the IMF](http://www.imf.org/external/country/BGD/index.htm)
- [IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [ECF](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/04/Extended-Credit-Facility)
- [EFF](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/20/56/Extended-Fund-Facility)
- [RSF](https://www.imf.org/en/About/Factsheets/Sheets/2022/resilience-and-sustainability-facility-rsf)
- [U.S. dollar per SDR](https://www.imf.org/external/np/fin/data/rms_sdrv.aspx)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/01/30/pr2325-bangladesh-imf-executive-board-approves-usd-ecf-eff-and-usd-under-rsf_