Metropolis Desk-
The International Monetary Fund (IMF) has defended lowering its prediction for GDP growth in Bangladesh for the fiscal year 2023–2024, claiming that the revision was “pretty reasonable” given the country’s continued difficulties, which include high inflation.
In the “World Economic Outlook” released on October 10 by the United Nations financial agency, the updated estimate was 6 percent.
On the other hand, its April edition had predicted 6.5 percent.
The director of the Asia and Pacific Department, Krishna Srinivasan, stated that Bangladesh is experiencing high commodity prices, a slowdown in external demand, and ongoing global monetary tightening.
In answer to a question from a journalist at an IMF-organized press briefing on the Asia and Pacific Region’s Economic Outlook in Morocco on Friday, he stated that all these variables still have an impact on Bangladesh’s economy.
He stated, “And that’s why we have growth at 6 percent in FY ’24, unchanged from FY ’23,” according to a transcript of the news conference.
Speaking on the government of Bangladesh’s 7.5 percent growth target, he remarked, “It’s not very uncommon for the countries to have a higher growth number than us.”
“Now, Bangladesh has taken significant measures to address the macroeconomic challenges,” stated Srinivasan.
Differentiating between goals for growth and economic stability is crucial. He claimed that to lower inflation, the nation has tightened its monetary policy stance and permitted more flexible exchange rates while maintaining systemic unification.
Furthermore, he said, the administration has maintained a cautious budgetary strategy and refocused expenditure to assist the weak and impoverished.
Thus, the goal of macro stability is being pursued at this moment. In that scenario, a five percent growth seems reasonable,” Srinivasan stated.
Bangladesh now has tremendous growth potential going forward, he said.
With favorable demographics, Bangladesh is well-positioned to become a middle-income country after it resolves the crisis and implements comprehensive reforms, he said.
“…for Bangladesh, one of the key objectives is to raise revenues to support both the development objectives and to support infrastructure needs…which will also boost the productive potential of the economy,” stated Srinivasan.
Improving revenue generation was one of the requirements attached to a $4.7 billion loan from the IMF. It had the goal of collecting Tk 3.45 crore in taxes for the fiscal year 2022–2023, which was not accomplished.
The government needs to raise an extra 0.5 percent of GDP in revenue for the current fiscal year. Currently in Bangladesh, an IMF delegation is assessing how well the loan’s associated goals have been met.
“So overall, I think, the economy is off on the good track in terms of meeting the objectives of the program, getting inflation under control, addressing the macro challenges given a very difficult global environment,” according to the transcript.
