IMF asks BD to boost growth

Published July 13, 2003

WASHINGTON, July 12: The International Monetary Fund on Friday praised Bangladesh’s prudence on managing the recovery of its economy but said challenges lay ahead to further boost growth and reduce poverty.

“Economic growth is buoyant, inflation remains moderate and international reserves have risen,” the IMF board said in a statement after a regular review of the poverty-stricken country’s economy.

The Washington-based lender approved a $490 million aid package for Bangladesh in June to help it fight poverty, spur employment and help strengthen its economy.

Nearly half of Bangladesh’s 130 million people are without enough food and other basic necessities, and its government has proposed a plan to halve the number of poor by 2015.

The IMF board said any plan to reduce poverty would require wider economic stability and a better investment climate. It recommended a monitoring system to gauge progress in its battle against poverty.

The IMF urged Dhaka to accelerate structural changes to its economic system, including fiscal reforms, privatization, more liberal exchange and trade systems, improvements to its judicial system, and proposed an anti-corruption commission.

It has asked Bangladesh to float its taka currency by next September in exchange for the loans, but Finance Minister M Saifur Rahman has said his country cannot be rushed.

The IMF said floating the currency would offer flexibility in managing macroeconomic policy, protect competitiveness and enhance resilience to economic shocks.

The fund said further economic progress was still stymied by a weak banking system, limited public resources, impediments to private sector growth and natural disasters.

Bangladesh’s economic recovery has been led by growing demand in its agricultural and industrial sectors. Real GDP growth is expected to rise to 5.5 percent this year from 5.2 per cent last year.

Its current account is expected to remain in a small surplus for the current fiscal year. International reserves meanwhile grew to nearly $2 billion by mid-June.—Reuters

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