The IMF has defended its lowered GDP growth forecast for Bangladesh in 2023-24 at 6%, calling it reasonable amid challenges like high inflation.
This revision, down from the earlier projection of 6.5% in April, is due to elevated commodity prices, reduced external demand, and global monetary tightening, as per Krishna Srinivasan, director of the Asia and Pacific Department.
He explained that Bangladesh is focusing on macroeconomic stability with measures like tightening monetary policy, flexible exchange rates, and prudent fiscal policies.
It is critical to distinguish between macro stability and growth objectives. He stated that the country has tightened its monetary policy stance in order to lower inflation and has allowed for more flexible exchange rates while unifying the exchange rate system.
In addition, the government has maintained a careful budgetary strategy and reprioritized expenditure to assist the poor and vulnerable, he said.
"At this point in time, the focus is on macroeconomic stability." In that context, 5% growth is quite fair," Srinivasan said.
The government's target of 7.5% growth is considered high, but Srinivasan believes Bangladesh has strong growth potential in the future. He emphasized the importance of increasing revenue to support development and infrastructure.
An IMF delegation is reviewing performance related to loan conditions. Srinivasan sees Bangladesh as on track to meet program objectives and control inflation in a challenging global environment.
