## Bangladesh: Selected Issues

_IMF Staff Country Reports, December 14, 2023_

## Source details

**Canonical URL:** [Bangladesh: Selected Issues](https://www.imf.org/en/publications/cr/issues/2023/12/13/bangladesh-selected-issues-542463)

## Other formats

- [Markdown version](/en/publications/cr/issues/2023/12/13/bangladesh-selected-issues-542463/index.md)
- [Structured JSON version](/en/publications/cr/issues/2023/12/13/bangladesh-selected-issues-542463/index.json)
- [Bundle manifest](/en/publications/cr/issues/2023/12/13/bangladesh-selected-issues-542463/bundle-manifest.json)

## Bibliographic details
- Published: December 14, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400260728.002

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### Overview
- Publication date: December 14, 2023.
- This Selected Issues paper discusses policy options and trade-offs in Bangladesh amid a bout of persistently high inflation since the beginning of Russia’s war in Ukraine.
- The analysis applies a semistructural Quarterly Projection Model to assess drivers of elevated inflation and evaluate policy options to tame inflation and their trade-offs.

### Key findings
- Bangladesh experienced a prolonged period of stable inflation followed by persistently high inflation starting with Russia’s war in Ukraine.
- A concerted but carefully calibrated tightening of the monetary policy stance will be needed to bring inflation down to Bangladesh Bank’s target range.
- Concurrent fiscal policy consolidation could aid a faster disinflation process but could lead to disproportionately substantial output costs because the Bangladesh economy is operating at below potential and navigating multiple external shocks.
- Ongoing reforms to modernize the monetary policy framework could reduce economic volatility and costs associated with significant exchange rate pressures and heightened inflation.

### Policy analysis and recommendations
- Monetary policy:
  - Tighten the monetary policy stance in a concerted but carefully calibrated manner to restore price stability and bring inflation to Bangladesh Bank’s target range.
- Fiscal policy:
  - Consider fiscal consolidation to support disinflation, with caution due to potential disproportionate output costs given below-potential economic conditions and external shocks.
- Institutional reform:
  - Continue reforms to modernize the monetary policy framework to reduce volatility and the economic costs of exchange rate pressures and elevated inflation.

### Modeling approach and analytical scope
- Analytical tool: semistructural Quarterly Projection Model.
- Purpose: to assess drivers of recently elevated inflation in Bangladesh and evaluate different policy options and associated trade-offs.

### Subject areas and keywords
- Subjects: Exchange rate arrangements, Exchange rate flexibility, Exchange rates, Foreign exchange, Gender, Gender inequality, International organization, Monetary policy, Women.
- Keywords: B. monetary policy option, C. managing transition, Exchange rate arrangements, Exchange rate flexibility, Exchange rates, Gender inequality, gender responsive budgeting, Global, IMF resident representative's office, inflation expectation, South Asia, Women.

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## Content in this bundle

- **Bangladesh: Selected Issues; IMF Country Report No. 23/410; November 21, 2023**
  - [Bangladesh: Selected Issues; IMF Country Report No. 23/410; November 21, 2023 (Markdown version)](/-/media/files/publications/cr/2023/english/1bgdea2023004.pdf.md){rel="alternate" type="text/markdown"}
  - [Bangladesh: Selected Issues; IMF Country Report No. 23/410; November 21, 2023 (PDF)](/-/media/files/publications/cr/2023/english/1bgdea2023004.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2023/12/13/bangladesh-selected-issues-542463_