DHAKA: Bangladesh's Gross domestic product (GDP) is expected to grow by 6.6 percent in fiscal year 2021-2022, according to the International Monetary Fund (IMF) (July 2021-June 2022). According to the source, the projection came after an IMF staff team led by Rahul Anand visited Dhaka from December 5 to 19.

"Despite being hit by multiple waves of the Covid-19 pandemic, the authorities' quick and decisive actions, supported by the external environment, resulted in a much faster rebound than Bangladesh's regional peers," the IMF team said in a statement posted on its website on Sunday. "Growth is expected to accelerate to 6.6 percent  in FY22 as the impact of Covid-19 fades and policies remain accommodating," the report said.

According to the IMF, inflation will be slightly higher than the authorities' target due to non-food price inflation and recent fuel price increases. The fiscal deficit is expected to reach 6.1 percent  of GDP in FY22 as pandemic-related spending rises, according to the report. "As the economy recovers, the central bank should closely monitor inflationary pressures and be prepared to normalise," the IMF team said.

Capitals on lending and borrowing rates limit policy space and should be phased out in order to strengthen market-based pricing, improve credit allocation, and monetary transmission, according to the report. "More exchange rate flexibility, combined with the preservation of foreign exchange reserves, will help buffer external shocks," the IMF team stated.

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