Bangladesh growth expected to pick up to 6.6%: IMF

The International Monetary Fund (IMF) has said that growth in Bangladesh was expected to pick up to 6.6 per cent in FY22, as the impact of Covid-19 abates and policies remain accommodative.

IMF Article 4 mission disclosed the forecast during a press conference in Dhaka on Sunday.

The IMF staff team, led by Rahul Anand visited Dhaka from December 5-19 to hold discussions on the 2021 Article IV Consultation with Bangladesh.

“Despite being hit by multiple waves of the Covid-19 pandemic, quick and decisive actions by the authorities, supported by the external environment, led to a much quicker rebound than Bangladesh’s regional peers,” Anand said.

"Growth is expected to pick up to 6.6 per cent in FY22, and as the external environment improves and the domestic vaccination program progresses, growth is projected to increase to 7.1 per cent in FY23," he added.  

The IMF also cautioned the central bank to monitor inflationary pressures and stand ready to normalise as the economy rebounds.

“More decisive reforms are needed to facilitate Bangladesh’s transition out of the LDC status and to maintain competitiveness in a post-pandemic world,” Anand said.

The global donor also suggested that priorities should shift towards creating greater fiscal space, reducing fiscal risks, preserving the stability of the financial system, and modernising policy frameworks.

To maintain competitiveness in a post-pandemic world, structural policies should focus on accelerating growth, attracting private investment, and enhancing productivity to lift growth potential. Building climate resilience remains critical, it added.

IMF mentioned that it stands ready to support the government’s reform efforts through policy advice and capacity building, including monetary and fiscal policies, financial sector supervision and regulation, and macroeconomic statistics.

The team met with the Bangladesh Bank Governor, the Finance Secretary, the Chairman of the National Board of Revenue, and other senior government officials, as well as representatives of the business and banks, labor unions, and development partners.

The team also expressed their gratitude towards the authorities for their hospitality and candid discussions.

In April, IMF set 7.5 per cent gross domestic product growth for the South Asian country’s economy in the current fiscal year. However, in October, they trimmed the economic expansion forecast for Bangladesh to 6.5 per cent for the 2021-22 fiscal year.