IMF revises growth projection for Bangladesh to 6.6 pct for FY 2022

IMF revises growth projection for Bangladesh

• IMF has revised its growth projection for Bangladesh to 6.6 percent for FY 2022. The IMF team led by Rahul Anand which visited Dhaka from Dec 5-19 commended the quick and decisive action by the government of Bangladesh that led to a much faster recovery than its regional peers. It predicted that growth is likely to rise to 7.1 percent in FY 2023.
• It however cautioned the central bank to closely monitor the inflationary pressure. It said that the inflation is projected to be higher than the authorities’ target reflecting non-food inflation and recent fuel price increase.
• It called for market-based pricing in place of caps on lending to improve credit allocation and monetary transmission.  To buffer external shocks, the IMF recommended greater exchange rate flexibility together with safeguarding foreign exchange reserves.
• The IMF said that adopting a fuel pricing mechanism will help accommodate additional social, developmental and climate-related spending. It recommended modernising revenue administration, streamlining tax expenditure and separating National Savings Certificate (NSC) from direct budget finance for improving the fiscal policy framework of the government.
• Commenting on the transition from LDC status, the IMF said that more decisive reforms are needed to maintain competitiveness in the post-pandemic world. It called for structural reforms focused on improving governance, diversifying exports, increasing productivity and building climate resilience to lift growth potential.

 

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Published date : 21 Dec 2021 07:24PM