## Assessing Fiscal Risks in Bangladesh

_IMF Working Papers, May 19, 2015_

## Source details

**Canonical URL:** [Assessing Fiscal Risks in Bangladesh](https://www.imf.org/en/publications/wp/issues/2016/12/31/assessing-fiscal-risks-in-bangladesh-42947)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/assessing-fiscal-risks-in-bangladesh-42947/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/assessing-fiscal-risks-in-bangladesh-42947/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/assessing-fiscal-risks-in-bangladesh-42947/bundle-manifest.json)

## Bibliographic details
- Authors: Leandro Medina
- Published: May 19, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513551081.001

---

### Summary and objective
- This paper identifies, quantifies, and assesses fiscal risks in Bangladesh.
- It measures risks arising from shocks to GDP growth, the exchange rate, commodity prices, and interest rates.
- It analyzes specific fiscal and institutional risks: the pension system, the issuance of guarantees, the state-owned commercial banks, and the external borrowing and debt management strategy.
- Key finding: fiscal aggregates are particularly sensitive to shocks to commodity prices and exchange rates.
- Other risks that could affect fiscal aggregates are the unfunded pension system and the limited institutional capacity.

### Methodology
- Sensitivity analysis.
- Stochastic simulations.

### Major identified risk channels
- Macroeconomic shocks:
  - Shocks to GDP growth.
  - Shocks to the exchange rate.
  - Shocks to commodity prices.
  - Shocks to interest rates.
- Specific fiscal and institutional risks:
  - The pension system (noted as unfunded).
  - The issuance of guarantees (contingent liabilities).
  - State-owned commercial banks.
  - External borrowing and debt management strategy.

### Findings and implications
- Fiscal aggregates exhibit particular sensitivity to:
  - Commodity price shocks.
  - Exchange rate shocks.
- Institutional and structural vulnerabilities that could exacerbate fiscal risks:
  - An unfunded pension system.
  - Limited institutional capacity.

### Subject areas and keywords
- Subject: Aging, Expenditure, Fiscal risks, Labor, Macroeconomic risks, Pension spending, Pensions, Public debt, Public financial management (PFM)
- Keywords include: Bangladesh; commodity price; contingent liabilities; debt; exchange rate; expenditure; fiscal risks; guarantees; Macroeconomic risks; Pension spending; pensions; shocks to GDP growth; sovereign debt; vis-à-vis budget figure; WP

---

## Content in this bundle

- **Assessing Fiscal Risks in Bangladesh; by Leandro Medina; IMF Working Paper No. 15/110; May 1, 2015**
  - [Assessing Fiscal Risks in Bangladesh; by Leandro Medina; IMF Working Paper No. 15/110; May 1, 2015 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2015/_wp15110.pdf.md){rel="alternate" type="text/markdown"}
  - [Assessing Fiscal Risks in Bangladesh; by Leandro Medina; IMF Working Paper No. 15/110; May 1, 2015 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2015/_wp15110.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/assessing-fiscal-risks-in-bangladesh-42947_