The International Monetary Fund (IMF) has forecasted Bangladesh’s economic growth at below 6% in the 2013-14 fiscal year, whereas the government had set the target of 7.2% for the period.
“We are seeing the slowdown in the economic activity as some special indicators, like import, export and credit to the private sector, are showing a slow trend. All of these indicators indicate that the economy is slow-going,” said Rodrigo Cubero, who headed an IMF mission to Dhaka.
“The indicators are very important for the economy, and they are likely to slow down in the next six months due to political uncertainty, labour unrest and poor demand of private sector credit,” he added.
Cubero expressed the outlook on the Bangladesh economy at a press conference on Sunday at the Bangladesh Bank headquarters in the capital.
The IMF mission chief also announced the release of a $140.5m fund for Bangladesh under a three-year Extended Credit Facility (ECF), which will bring the total disbursement under the arrangement to about $562.3m.
The IMF mission arrived in Dhaka on September 22 for a two-week visit to conduct a review of the ECF arrangement.
Cubero also said Bangladesh Bank had addressed the weaknesses of state-owned banks and enhanced their corporate governance, internal audit and credit risk policy to ensure profitable lending opportunities.
“The government has made significant reforms in the economic sector, including the Bank Company Act and debt management of banks, which has had good impact on the economy. So, we are confident about the strength of the Bangladesh economy,” said Cubero.
The mission also welcomed the government’s plans, in coordination with development partners, the business community, labour unions and international buyers, to improve working conditions and safety standards for workers in Bangladesh, which are critical to ensuring sustained and inclusive growth, particularly in the readymade garments industry.
