IMF Bangladesh forecast low

Despite the economy growing by 6% the IMF said that this was lower than expected if political violence persists

IMF Bangladesh forecast low

World Bulletin / News Desk

The Bangladesh economy will grow by about 6 percent, less than previously forecast, in the year to end-June if political violence persists, the International Monetary Fund said on Tuesday.

More than 120 people have died since protests surged on Jan. 5, the first anniversary of contested national elections. Transport blockades and strikes, led by the main opposition party, the Bangladesh Nationalist Party, and aimed at toppling the government, have disrupted business in the impoverished South Asian nation of 160 million people.

"The economy may grow around 6 percent in the current fiscal year of 2014/15 instead of government-targeted growth of 7.3 percent if current political unrest and violence continue," said IMF mission chief Rodrigo Cubero.

The IMF visit, which began on Feb. 25 and ends on Tuesday, was to review a three-year Extended Credit Facility, currently worth about $890 million, which is due to end next month.

Cubero told reporters the unrest was taking its toll on the economy and warned of more economic damage if the protest violence persists.

He said lower food prices had eased inflation but with strong import growth and the unrest disrupting exports,Bangladesh's current account was expected to swing into deficit.

"Nevertheless, foreign exchange reserves have continued to increase. Should calm be restored and uncertainty abate, growth should strengthen to 6.5 percent in the fiscal year of 2015/16," Cubero said.

Bangladesh's annual inflation rate rose in February, after declining since August, as renewed unrest sent food and non-food prices higher despite lower global commodity prices.

Consumer prices in February rose 6.14 percent, up from 6.04 percent a month earlier, the statistics office said on Tuesday.

"There is every possibility that inflation will climb further due to ongoing political unrest," a statistics official said.

Last Mod: 10 Mart 2015, 17:18
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