The International Monetary Fund (IMF) on Sunday highlighted the biggest economic challenges for Bangladesh while asserting that the country is “one of the fastest growing economies in the Asia-Pacific region.”
An IMF staff team, led by Mission Chief for Bangladesh Rahul Anand, conducted a staff visit to Dhaka from April 25 to Sunday, to discuss recent macroeconomic developments and implementation of the Fund-supported program.
The team shared the statement after the visit concluded.
“Against a challenging economic backdrop, Bangladesh remains one of the fastest growing economies in the Asia-Pacific region. However, persistent inflationary pressures, elevated volatility of global financial conditions, and slowdown in major advanced trading partners continue to weigh on growth, foreign currency reserves, and the Taka,” reads the statement.
“During the visit, we discussed recent macroeconomic and financial sector developments. We also took stock of the progress made toward meeting key commitments under the Fund-supported program. This will be formally assessed in the first review of the Extended Credit Facility (ECF) / Extended Fund Facility (EFF) / Resilience and Sustainability Facility (RSF) arrangements, which is expected to be undertaken later this year,” it adds.
The statement further notes that the IMF team held meetings with Bangladesh Bank Governor Abdur Rouf Talukder, Finance Secretary Fatima Yasmin, and other senior government and Bangladesh Bank officials.
“We also met with representatives from the private sector, bilateral donors, and development partners. We would like to thank the authorities for candid discussions and their warm hospitality. We look forward to continuing our engagement in support of Bangladesh and its people,” it concludes.
Earlier, IMF said Bangladesh is set to overtake China in terms of GDP growth rate in the current financial year.
Bangladesh will be in second place, after Vietnam, for achieving growth in the next fiscal year. Furthermore, Bangladesh is expected to surpass both China and India in terms of growth in 2024, according to the IMF's Regional Economic Outlook for Asia and Pacific May 2023 report.
In Bangladesh, growth will slow to 5.5% in 2023 because of demand-management measures, which is still higher than China's projected growth rate of 5.2%. But the economy of China is much bigger than that of Bangladesh.
The IMF report suggests that the recently approved Extended Fund Facility for Bangladesh will help address economic challenges caused by Russia's war in Ukraine, and the Resilience and Sustainability Facility arrangement will expand fiscal space to finance climate investment priorities and build resilience against long-term climate risks.
