bdnews24.com :
The International Monetary Fund’s executive board approved about $258.3 million in extra payments to Bangladesh on Wednesday after a review of the country’s support programme.
The disbursement takes total payments to the country under a three-year Extended Credit Facility (ECF) arrangement to about $904.2 million, the IMF said in a statement.
The decision follows the fifth and sixth review of Bangladesh’s economic program under a three-year ECF arrangement, it said.
The three-year ECF arrangement for Bangladesh was approved by the Executive Board in April, 2012 for a total amount of about $904.2 million, or 120 percent of quota. The arrangement was extended first to July 31 and then to October 31, 2015.
The IMF has appreciated Bangladesh’s economic restructuring. Following the IMF’s executive board discussion, its deputy managing director and acting chair Mitsuhiro Furusawa said in a statement: “Prudent macroeconomic policies and structural reforms, with support from the Extended Credit Facility (ECF)
arrangement, have helped steer the Bangladesh economy through domestic and global challenges in the last three and a half years.”
He said growth has been robust, inflation has eased, foreign exchange reserves have risen to a comfortable position, and public debt has remained stable as a share of GDP.
“Against a challenging and uncertain global landscape and upside inflation risks, the authorities should maintain prudent fiscal and monetary policies to underpin sustained high growth, build resilience to shocks, and further reduce poverty.”
Furusawa said that structural reforms will play an important role in “unleashing the full potential” of Bangladesh’s economy. “Key structural challenges however remain. Bangladesh’s already low tax-to-GDP ratio declined steadily since fiscal year 2012-13. Boosting revenue is necessary to maintain fiscal sustainability and build fiscal space for public investment in critical infrastructure and stronger social safety nets,” the statement quoted the IMF official.
Furusawa insisted that Bangladesh should “steadfastly implement the new value-added tax (VAT) for a launch by July 2016.” “The new VAT will simplify tax administration and lower taxpayers’ compliance costs, and it is designed to protect the poor and small businesses.”
Furusawa pitched strongly for reduction of what he described as “inefficient and regressive energy subsidies, including by aligning domestic fuel prices with international prices”.
He called for strengthening financial management and reporting in state-owned enterprises.
“Another important priority is to continue to strengthen the resilience of the banking sector. State-owned banks, in particular, should be reformed and guided by good corporate governance practices, supported by complete branch automation by 2016. “To further boost inclusive growth, continued efforts are needed at removing infrastructure bottlenecks, particularly in power and transportation, improving the business climate, and ensuring better labor rights and safer working conditions.”
The International Monetary Fund’s executive board approved about $258.3 million in extra payments to Bangladesh on Wednesday after a review of the country’s support programme.
The disbursement takes total payments to the country under a three-year Extended Credit Facility (ECF) arrangement to about $904.2 million, the IMF said in a statement.
The decision follows the fifth and sixth review of Bangladesh’s economic program under a three-year ECF arrangement, it said.
The three-year ECF arrangement for Bangladesh was approved by the Executive Board in April, 2012 for a total amount of about $904.2 million, or 120 percent of quota. The arrangement was extended first to July 31 and then to October 31, 2015.
The IMF has appreciated Bangladesh’s economic restructuring. Following the IMF’s executive board discussion, its deputy managing director and acting chair Mitsuhiro Furusawa said in a statement: “Prudent macroeconomic policies and structural reforms, with support from the Extended Credit Facility (ECF)
arrangement, have helped steer the Bangladesh economy through domestic and global challenges in the last three and a half years.”
He said growth has been robust, inflation has eased, foreign exchange reserves have risen to a comfortable position, and public debt has remained stable as a share of GDP.
“Against a challenging and uncertain global landscape and upside inflation risks, the authorities should maintain prudent fiscal and monetary policies to underpin sustained high growth, build resilience to shocks, and further reduce poverty.”
Furusawa said that structural reforms will play an important role in “unleashing the full potential” of Bangladesh’s economy. “Key structural challenges however remain. Bangladesh’s already low tax-to-GDP ratio declined steadily since fiscal year 2012-13. Boosting revenue is necessary to maintain fiscal sustainability and build fiscal space for public investment in critical infrastructure and stronger social safety nets,” the statement quoted the IMF official.
Furusawa insisted that Bangladesh should “steadfastly implement the new value-added tax (VAT) for a launch by July 2016.” “The new VAT will simplify tax administration and lower taxpayers’ compliance costs, and it is designed to protect the poor and small businesses.”
Furusawa pitched strongly for reduction of what he described as “inefficient and regressive energy subsidies, including by aligning domestic fuel prices with international prices”.
He called for strengthening financial management and reporting in state-owned enterprises.
“Another important priority is to continue to strengthen the resilience of the banking sector. State-owned banks, in particular, should be reformed and guided by good corporate governance practices, supported by complete branch automation by 2016. “To further boost inclusive growth, continued efforts are needed at removing infrastructure bottlenecks, particularly in power and transportation, improving the business climate, and ensuring better labor rights and safer working conditions.”
