{
  "title": "IMF Executive Board Concludes the Second Review under the Extended Credit Facility, Extended Fund Facility, Resilience and Sustainability Facility for Bangladesh",
  "publication": "IMF News, June 24, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/06/24/pr24234-bangladesh-imf-exec-board-concludes-2nd-review-ecf-eff-rsf",
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  "summary": "The IMF Executive Board concluded the second review under of Bangladesh’s arrangements under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF), providing the country with immediate access to about US$928 million.",
  "publishDate": "2024-06-24",
  "sections": [
    {
      "heading": "Review outcome and disbursements",
      "content": "- The Executive Board concluded the second review under Bangladesh’s arrangements under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).\n- Immediate access made available:\n  - SDR704.70 million (about US$928 million) under the ECF/EFF.\n  - SDR166.68 million (about US$220 million) under the RSF.\n- Cumulative disbursements following these reviews:\n  - ECF/EFF total disbursements: SDR1,409.40 million (about US$1,856 million).\n  - RSF total disbursements: SDR333.35 million (about US$439 million).\n- The Executive Board granted a waiver of nonobservance of a performance criterion for the floor on net international reserves on the basis of corrective actions."
    },
    {
      "heading": "Economic context and recent developments",
      "content": "- Key challenges:\n  - Stubbornly high international commodity prices.\n  - Continued global financial tightening amplifying macroeconomic vulnerabilities.\n  - A sudden reversal of the financial account that has kept foreign exchange (FX) reserves and the Taka under pressure.\n- Authorities’ response:\n  - Recent bold exchange rate reforms; implementation of a new exchange rate arrangement and realignment of the exchange rate."
    },
    {
      "heading": "Projections and near-term outlook",
      "content": "- Growth and inflation projections:\n  - Real GDP growth slowed to 4.8 percent in FY24H1.\n  - Real GDP growth projected at 5.4 percent in FY24 (owing to ongoing import compression and policy tightening).\n  - Real GDP growth projected to pick up to 6.6 percent in FY25 (as imports rebound and FX pressures ease).\n  - Headline inflation reached 9.7 percent year-on-year in April 2024.\n  - Inflation projected at approximately 9.4 percent in FY24 and anticipated to decline to around 7.2 percent in FY25.\n- Reserves and external resilience:\n  - Following the exchange rate realignment, gross international reserves (GIR) are projected to gradually increase.\n  - Uncertainties remain high and risks are tilted to the downside."
    },
    {
      "heading": "Policy recommendations and reform priorities (from the Acting Chair statement)",
      "content": "- Near-term priorities:\n  - Rebuild external resilience and bring down inflation.\n  - Continue monetary and fiscal policy tightening; further tightening if external and inflationary pressures intensify.\n  - Periodic reviews of the crawling peg to ensure effectiveness.\n- Structural and institutional reforms:\n  - Modernize the monetary policy framework and improve policy transmission.\n  - Smoothly transition to a flexible exchange rate regime and bolster FX reserve buffers.\n  - Address vulnerabilities in the financial sector; strengthen banking regulation, supervision, and governance.\n  - Deepen capital markets to mobilize financing for long-term growth objectives.\n  - Raise tax revenues and rationalize expenditure, including by reducing subsidies, to generate fiscal space for social, development, and climate initiatives.\n  - Strengthen public financial and investment management and enhance state-owned enterprise oversight to improve spending efficiency and mitigate fiscal risks.\n  - Sustain structural reforms to reach upper middle-income country status by 2031: diversify exports, attract more foreign direct investment, and strengthen governance.\n- Climate and resilience priorities:\n  - Build resilience to climate change and natural disasters by strengthening institutions and policy coordination, improving climate spending efficiency, and mobilizing climate financing.\n  - The launch of the Bangladesh Climate and Development Platform in collaboration with development partners is noted as a welcome development."
    },
    {
      "heading": "Selected economic indicators (FY2021–26; projections where indicated)",
      "content": "- Real GDP (annual percent change)\n  - FY21: 6.9\n  - FY22: 7.1\n  - FY23: 5.8\n  - FY24: 5.4\n  - FY25: 6.6\n  - FY26: 7.6\n- Consumption — Private (annual percent change)\n  - FY21: 8.0\n  - FY22: 7.5\n  - FY23: 3.6\n  - FY24: 4.9\n  - FY25: 6.3\n  - FY26: 6.2\n- Consumption — Public (annual percent change)\n  - FY21: 10.5\n  - FY22: 5.0\n  - FY23: 6.7\n  - FY24: 7.3\n- Gross Capital Formation (annual percent change)\n  - FY21: 8.1\n  - FY22: 11.7\n  - FY23: 2.9\n  - FY24: 10.3\n  - FY25: 9.7\n  - FY26: 7.8\n- Trade — Exports of goods and services (annual percent change)\n  - FY21: 9.2\n  - FY22: 29.4\n  - FY23: 10.6\n  - FY24: 15.0\n  - FY25: 4.7\n  - FY26: 5.9\n- Trade — Imports of goods and services (annual percent change)\n  - FY21: 15.3\n  - FY22: 31.2\n  - FY23: -2.6\n  - FY24: 2.2\n  - FY25: 5.1\n- Prices (annual percent change)\n  - GDP Deflator — FY21: 4.1; FY22: 5.6\n  - CPI inflation (annual average) — FY21: 6.1; FY22: 9.0; FY23: 9.4; FY24: 7.2\n  - CPI inflation (end of period) — FY21: 8.4; FY22: 7.0; FY23: 5.5\n- Central government operations (in percent of GDP)\n  - Total revenue and grants — FY21: 8.9; FY22: 8.2; FY23: 8.8; FY24: 9.3; FY25: 9.9\n  - Of which: tax revenue — FY21: 13.0; FY22: 12.8; FY23: 13.5; FY24: 13.3; FY25: 14.7\n  - Of which: Annual Development Program (ADP) — FY21: 4.5; FY22: 4.3; FY23: 4.6\n  - Overall balance (including grants) — FY21: -3.6; FY22: -4.1; FY23: -4.6; FY24: -4.0; FY25: -4.8\n  - Overall balance (excluding grants) — FY21: -3.7; FY22: -4.2; FY23: -4.7; FY24: -4.9\n  - Primary balance (including grants) — FY21: -1.6; FY22: -2.1; FY23: -2.5; FY24: -2.8; FY25: -2.2; FY26: -2.4\n- Public sector total debt (percent of GDP)\n  - FY21: 35.6\n  - FY22: 37.9\n  - FY23: 39.3\n  - FY24: 41.3\n  - FY25: 40.7\n  - FY26: 40.9\n  - Of which: External debt — FY21: 15.1; FY22: 15.4; FY23: 17.5; FY24: 18.9; FY25: 18.6; FY26: 17.8\n- Balance of Payments (in percent of GDP)\n  - Current account balance — FY21: -1.1; FY22: -0.7; FY23: -0.1; FY24: -2.7\n  - Trade balance — FY21: -6.4; FY22: -8.0; FY23: -5.7; FY24: -6.5\n  - Service balance — FY21: -0.9; FY22: -1.2\n  - Income balance — FY21: -0.8\n  - Transfers — FY21: 6.0; FY22: 4.8\n  - Capital account balance — FY21: 0.1; FY22: 0.0\n  - Financial account balance — FY21: 3.4; FY22: -0.5; FY23: -1.3; FY24: 3.5\n  - Foreign direct investment, net — FY21: 0.3; FY22: 0.4; FY23: 0.9; FY24: 1.1\n- Gross international reserves (billions of U.S. dollars)\n  - FY21: 46.4\n  - FY22: 33.4\n  - FY23: 24.8\n  - FY24: 19.0\n  - FY25: 23.3\n  - FY26: 32.1\n  - In months of next year’s imports — FY21: 2.3; FY22: 2.5; FY23: 3.1\n- Money and credit (in percent of GDP)\n  - Reserve money — FY21: 9.8; FY22: 8.7; FY23: 8.5\n  - Broad money (M2) — FY21: 54.6; FY22: 52.9; FY23: 50.7; FY24: 50.5; FY25: 51.3; FY26: 51.9\n  - Credit to private sector — FY21: 36.2; FY22: 36.6; FY23: 35.3; FY24: 33.9; FY25: 32.0; FY26: 32.3\n  - Credit to private sector (percent change) — FY21: 13.7; FY22: 7.7; FY23: 14.6\n- Savings and Investment (in percent of GDP)\n  - Gross national savings — FY21: 30.8; FY22: 29.3; FY23: 31.0; FY24: 28.7; FY25: 28.5; FY26: 29.0\n  - Gross investment — FY21: 30.9; FY22: 28.8; FY23: 31.7; FY24: 23.7; FY25: 24.5; FY26: 23.4\n- Memorandum item:\n  - Nominal GDP (in billions of Taka) — FY21: 35,302; FY22: 39,717; FY23: 44,908; FY24: 50,068; FY25: 57,045; FY26: 64,844\n\nIMF Executive Board Concludes the Second Review under the Extended Credit Facility, Extended Fund Facility, Resilience and Sustainability Facility for Bangladesh — Press Release No. 24/234, June 24, 2024.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- PRESS CENTER\n- Bangladesh and the IMF\n- IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet\n- Press Releases\n- Press Release No. 23/25\n- IMF Country Focus\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/06/24/pr24234-bangladesh-imf-exec-board-concludes-2nd-review-ecf-eff-rsf"
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    "Published: June 24, 2024",
    "The Executive Board concluded the second review under Bangladesh’s arrangements under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).",
    "Immediate access made available:",
    "Cumulative disbursements following these reviews:",
    "The Executive Board granted a waiver of nonobservance of a performance criterion for the floor on net international reserves on the basis of corrective actions.",
    "Key challenges:",
    "Authorities’ response:",
    "Growth and inflation projections:",
    "Reserves and external resilience:",
    "Near-term priorities:",
    "Structural and institutional reforms:",
    "Climate and resilience priorities:",
    "Real GDP (annual percent change)",
    "Consumption — Private (annual percent change)",
    "Consumption — Public (annual percent change)",
    "Gross Capital Formation (annual percent change)",
    "Trade — Exports of goods and services (annual percent change)",
    "Trade — Imports of goods and services (annual percent change)",
    "Prices (annual percent change)",
    "Central government operations (in percent of GDP)",
    "Public sector total debt (percent of GDP)",
    "Balance of Payments (in percent of GDP)",
    "Gross international reserves (billions of U.S. dollars)",
    "Money and credit (in percent of GDP)",
    "Savings and Investment (in percent of GDP)",
    "Memorandum item:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[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)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[Press Release No. 23/25](https://www.imf.org/en/News/Articles/2023/01/30/pr2325-bangladesh-imf-executive-board-approves-usd-ecf-eff-and-usd-under-rsf)",
    "[IMF Country Focus](https://www.imf.org/en/News/Articles/2024/06/12/cf-bangladesh-can-boost-growth-and-climate-resilience-by-investing-in-women)",
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