The ongoing civic unrest in Bangladesh is affecting the country’s economy, as a result of which its GDP growth is now expected to be below six per cent this year, the International Monetary Fund said.
“Unrest in recent months is affecting economic activity, with real GDP growth now expected to moderate to below 6 per cent in fiscal year (FY) 2013 (July 2012-June 2013),” David Cowen, the outgoing mission chief for Bangladesh, and Rodrigo Cubero, the new mission chief said in a joint statement on Wednesday.
However, the two IMF officials noted that despite global uncertainties, economic developments have been broadly as envisaged.
“Exports are picking up, remittances remain strong, reserves continue to rise, and inflation pressures have eased, supported by restrained fiscal and monetary policies,” they said.
The IMF said Bangladesh is on track to contain the budget deficit (excluding grants) to 4.5 per cent of GDP in fiscal 2013.
“While tax revenue has fallen short of the Government’s targets, expenditure has been kept under control, in part through containment of fuel and electricity subsidies,” they said.
During its just concluded trip to the country, the IMF mission met with the Minister of Finance, Bangladesh Bank Governor, Finance Secretary, and other senior officials, and development partners.