Bangladesh: Second Reviews Under the Extended Credit Facility Arrangement and the Arrangement Under the Extended Fund Facility, and Requests for Rephasing of Access, a Waiver of Nonobservance of a Performance Criterion, and Modifications of a Performance Criterion, and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Bangladesh

BANGLADESH SECOND REVIEWS UNDER THE EXTENDED CREDITFACILITY ARRANGEMENT AND THE ARRANGEMENTUNDER THE EXTENDED FUND FACILITY, AND REQUESTSFOR REPHASING OF ACCESS, A WAIVER OFNONOBSERVANCE OF A PERFORMANCE CRITERION,AND MODIFICATIONS OF A PERFORMANCE CRITERION,AND SECOND REVIEW UNDER THE RESILIENCE ANDSUSTAINABILITY FACILITY ARRANGEMENT—PRESSRELEASE;STAFF REPORT;AND STATEMENT BY THEEXECUTIVE DIRECTOR FORBANGLADESH June2024 In the context of theSecond Review under theExtendedCreditFacilityarrangement and theArrangement under theExtendedFundFacility,andRequestsforRephasing ofAccess,aWaiver ofNonobservance ofaPerformance Criterion,andModificationsof aPerformanceCriterion,andSecondReviewundertheResilience andSustainabilityFacilityArrangement,the following documents have been released and are included in this package: •APress Releaseincluding a statement by the Chair of the Executive Board. •TheStaff Reportprepared by a staff team of the IMF for the Executive Board’sconsideration onJune 24, 2024, following discussions that ended onMay8, 2024, withthe officials ofBangladeshoneconomic developments and policies underpinning theIMF arrangement under theExtended Credit Facility. Based on information available atthe time of these discussions, the staff report was completed onJune 7, 2024.•ADebt Sustainability Analysispreparedby the staffs of the IMF and the World Bank.•AWorld Bank Assessment Letter for the Resilience and Sustainability Facility.•AStatement by the Executive DirectorforBangladesh. TheIMF’s transparency policy allows for the deletion ofmarket-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reports andother documents. Copies of this report are available to the public fromInternational Monetary Fund•Publication ServicesPO Box 92780•Washington, D.C. 20090Telephone: (202) 623-7430•Fax: (202) 623-7201E-mail:publications@imf.org Web:http://www.imf.org International Monetary FundWashington, D.C. IMF Executive Board Concludes the Second Review under theExtended Credit Facility, Extended Fund Facility, Resilienceand Sustainability Facility for Bangladesh FOR IMMEDIATE RELEASE The IMF Executive Board concluded the second review under of Bangladesh’sarrangements under the Extended Credit Facility (ECF) and Extended Fund Facility(EFF), providing the country with immediate access to about US$928 million. The IMF Executive Board also concluded the second review of Bangladesh’sarrangement under the Resilience and Sustainability Facility (RSF), making availableabout US$220 million to support Bangladesh’s ambitious climate change agenda.1 Bangladesh’s homegrown comprehensive program of economic reforms is beingsupported by the IMF to help restore economic stability and protect the vulnerable,while laying the foundations for an inclusive and environmentally sustainable growth. Washington, DC – June 24, 2024:The Executive Board of the International MonetaryFund (IMF) completed the second review under the Extended Credit Facility (ECF), ExtendedFund Facility (EFF), andResilience and Sustainability Facility (RSF) arrangements forBangladesh, allowing the authorities to withdraw the equivalent to SDR704.70 million (aboutUS$928 million) under the ECF/EFF, and SDR166.68 million (about US$220 million) under theRSF. This brings total disbursements under the ECF/EFF so far to SDR1,409.40 million (aboutUS$1,856 million) and under the RSF to SDR333.35 million (about US$439 million).2Further,the Executive Board granted a waiver of nonobservance of a performance criterion for thefloor on net international reserves on the basis of corrective actions. Bangladesh’s economy continues to face multiple challenges. Stubbornly high internationalcommodity prices and continued global financial tightening have amplified macroeconomicvulnerabilities. Although the current account remains compressed, a sudden reversal of thefinancial account has kept foreign exchange (FX) reserves and the Taka under pressure. Inresponse to these pressures, the authorities have recently undertaken bold exchange ratereforms. Real GDP growth slowed to 4.8 percent in FY24H1, while headline inflation reached a decadehigh of 9.7 percent year-on-year in April 2024. Looking ahead, real GDP growth is projected at5.4 percent in FY24, owing to the ongoing import compression and policy tightening, and will pick up to 6.6 percent in FY25 as imports rebound and FX pressures ease. Inflation isprojected to remain elevated at approximately 9.4 percent in FY24 but is anticipated to declineto around 7.2 percent in FY25, on the back of the continued tighter policy mix and projectedlower global food and commodity prices. Following the exchange rate realignment, grossinternational reserves (GIR) are projected to gradually increase. Nonetheless, uncertaintiesaround the outlook remain high and risks are tilted to the downside. Bangladesh’s arrangements under the ECF/EFF and RSF were approved by the ExecutiveBoard on Jan