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Bangladesh,United States : IMF agrees US$987 million loan package for Bangladesh
Publish Date : 13-Apr-2012
The International Monetary Fund on Wednesday announced a nearly billion dollar loan package to reform Bangladesh\'s ailing economy.
Under the three year deal worth US$987 million, Bangladesh will embark on wide-reaching structural reforms to get its economy back on track and ease long-term poverty.
Battered by inflation, budget problems and a painful trade deficit, the country has plunged toward fiscal crisis during the past year.
Rising global oil prices have delivered a painful double whammy, spurring double-digit inflation while siphoning scarce foreign currency out of the country.
Meanwhile government fuel subsidies - worth as much as US$3.4 billion this year - have helped the poor but decimated the country\'s budget and forced the authorities to borrow from private banks.
\"Macroeconomic pressures in Bangladesh have intensified over the last 18 months,\" said David Cowen, the IMF\'s mission chief for Bangladesh.
He said that growth is expected to slow to 5.5 per cent this year, down from 6.7 per cent last year, while non-food inflation in March hit nearly 14 per cent.
The reforms include consolidating fuel subsidies and finding ways to pay for them; adjusting monetary policy to tackle inflation, overhauling the tax code, rewriting banking laws and eliminating trade barriers.
Some US$141 million is available immediately from the IMF.
