2013年-IMF国际货币组织全球_Bangladesh_First_Review_Under_the_Three_96页_1mb

Bangladesh: First Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Waiver of Nonobservance of a Performance Criterion

Core Content

This document outlines the first review under the three-year Extended Credit Facility (ECF) arrangement approved by the IMF in April 2012, along with the request for a waiver of the nonobservance of a performance criterion related to new nonconcessional external debt. It includes the staff report, joint debt sustainability analysis, staff statements, press release, and executive director's statement.

Main Objectives of the ECF Program

• Restoring macroeconomic stability
• Strengthening the external position
• Achieving higher, more inclusive growth to support poverty reduction
• Implementing structural reforms aligned with Bangladesh's Sixth Five-Year Plan (FY2011-15)

Program Performance and Key Outcomes

Performance Criteria and Targets

• All performance criteria (PCs) were met by end-June 2012, with notable outperformance in reserve accumulation.
• Indicative targets (ITs) for end-June and end-September 2012 were largely on track.
• Preliminary indicators for select quantitative targets were met by end-December 2012.
• Nonobservance of a continuous performance criterion on new nonconcessional external debt maturing in more than one year occurred in January 2013 due to new borrowing, prompting a request for a waiver.
• Structural benchmarks were not fully met due to delays in legislative changes and internal policy consensus, particularly regarding the new VAT law and banking sector reforms.

Fiscal Policy and Debt Management

• The overall budget deficit (excluding grants) in FY12 was 4.0% of GDP, and the target for FY13 is 4.5% of GDP, reflecting improved alignment with implementation capacity.
• Fiscal restraint has been observed since the second half of FY12, with government domestic borrowing controlled.
• Fuel and electricity subsidies were largely contained due to lower international oil prices and administered price increases.
• Fertilizer subsidy overruns are expected to be settled in FY13.
• The nonobservance of the PC on nonconcessional debt highlights the need for strengthened debt management practices.

Monetary and Exchange Rate Policy

• Monetary conditions tightened as programmed, with money market rates and Treasury yields rising.
• Exchange rate stabilized since early 2012, aiding foreign exchange accumulation.
• Gross foreign reserves (GIR) reached US$12.5 billion by end-December 2012, equivalent to 3.4 months of imports.
• Commercial banks fully settled FX overdrafts with the Bangladesh Bank (BB) by June 2012, a key benchmark.

Macroeconomic Outlook and Risks

Growth and Inflation

• Real GDP growth slowed to 6.3% in FY12 from 6.7% in FY11, primarily due to weaker net exports and lower investment growth.
• Headline inflation declined to 7.7% (y/y) in December 2012, down from a decade-high of 12.0% in September 2011.
• Nonfood inflation remains above the headline rate but has also moderated.

Balance of Payments (BOP)

• BOP reversed to a small surplus in FY12 from a moderate deficit in FY11.
• The current account deficit narrowed to 0.5% of GDP in FY12, compared to 2.0% in FY11.
• Remittances grew, providing support to the BOP and reserves.
• Oil and food import costs were a key factor in reducing import growth.

Key Risks

• Downside risks are the main concern in the near term, including:
  • Intensification of the euro area crisis, which could impact exports (especially the garment sector, which accounts for 80% of exports and employs 4 million workers).
  • Further deterioration in state-owned commercial bank (SOCB) finances, with two of four SOCBs failing to meet minimum capital requirements.
  • Escalation of pre-election political tensions, which could undermine fiscal and monetary stability.
  • Global oil and food price shocks, which could pressure the BOP and fiscal sustainability.
• Upside risks include unexpected remittances growth, which could boost reserves and domestic demand.

Key Policy Commitments and Reforms

A. Fiscal Policy and Debt Management

• VAT law was passed in late November 2012, with a single 15% rate for businesses with annual sales exceeding Tk 8 million (approx. US$100,000).
• Turnover tax and supplementary duties will apply to smaller businesses, with a lower threshold of Tk 2.4 million for exemption.
• VAT implementation is being supported by a steering committee, with a March 2013 benchmark for ministerial approval of the plan.
• Automation of taxpayer identification number issuance was delayed and rescheduled to June 2013.

B. Monetary and Exchange Rate Policy

• The Bangladesh Bank (BB) continued to limit liquidity support to primary dealer (PD) banks and meet repo needs at a higher penalty rate.
• FX purchases helped rebuild reserves, while sterilization through central bank bill auctions helped control money supply.
• Monetary policy remains restrained to contain inflation and protect reserves.

C. Financial Sector Reforms

• SOCBs are under pressure due to financial vulnerabilities, requiring greater accountability and macro-prudential controls.
• Banking law amendments and reforms are expected to improve financial performance and reduce nonperforming loans.

D. Investment Climate

• Efforts to ease controls and improve the investment climate are ongoing.
• Structural measures aim to modernize the tax regime, bolster fiscal controls, strengthen financial sector oversight, and improve trade and investment climate.

Staff Appraisal and Recommendations

• The staff recommends completing the review and supporting the authorities' request for a waiver of the nonobservance of the continuous performance criterion on new nonconcessional external debt.
• The program is on track, with adequate fiscal and monetary buffers to manage external shocks.
• Policy adjustments may be necessary if risks materialize, particularly through exchange rate and fiscal channels.
• The current resource envelope is considered sufficient assuming shocks are transitory.

Conclusion

The first review under the three-year ECF arrangement confirms that Bangladesh has met most program commitments, with notable progress in fiscal and monetary stability. However, structural reforms have been delayed, and external risks remain a major concern. The request for a waiver on the nonobservance of a performance criterion is supported by the staff, and further reforms are needed to secure long-term fiscal and external sustainability.