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

© 2024 International Monetary Fund IMF Country Report No. 24/186 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 In the context of the Second Review 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, the following documents have been released and are included in this package: • A Press Release including a statement by the Chair of the Executive Board. • The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on June 24, 2024, following discussions that ended on May 8, 2024, with the officials of Bangladesh on economic developments and policies underpinning the IMF arrangement under the Extended Credit Facility. Based on information available at the time of these discussions, the staff report was completed on June 7, 2024. • A Debt Sustainability Analysis prepared by the staffs of the IMF and the World Bank. • A World Bank Assessment Letter for the Resilience and Sustainability Facility. • A Statement by the Executive Director for Bangladesh. The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents. Copies of this report are available to the public from International Monetary Fund • Publication Services PO Box 92780 • Washington, D.C. 20090 Telephone: (202) 623-7430 • Fax: (202) 623-7201 E-mail: publications@imf.org Web: http://www.imf.org International Monetary Fund Washington, D.C. June 2024 PR24/234 IMF Executive Board Concludes the Second Review under the Extended Credit Facility, Extended Fund Facility, Resilience and Sustainability Facility for Bangladesh FOR IMMEDIATE RELEASE The IMF Executive Board concluded the second review under of Bangladesh’s arrangements 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’s arrangement under the Resilience and Sustainability Facility (RSF), making available about US$220 million to support Bangladesh’s ambitious climate change agenda.1 Bangladesh’s homegrown comprehensive program of economic reforms is being supported 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 Monetary Fund (IMF) completed the second review under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF) arrangements for Bangladesh, allowing the authorities to withdraw the equivalent to SDR704.70 million (about US$928 million) under the ECF/EFF, and SDR166.68 million (about US$220 million) under the RSF. This brings total disbursements under the ECF/EFF so far to SDR1,409.40 million (about US$1,856 million) and under the RSF to SDR333.35 million (about US$439 million).2 Further, the Executive Board granted a waiver of nonobservance of a performance criterion for the floor on net international reserves on the basis of corrective actions. Bangladesh’s economy continues to face multiple challenges. Stubbornly high international commodity prices and continued global financial tightening have amplified macroeconomic vulnerabilities. Although the current account remains compressed, a sudden reversal of the financial account has kept foreign exchange (FX) reserves and the Taka under pressure. In response to these pressures, the authorities have recently undertaken bold exchange rate reforms. Real GDP growth slowed to 4.8 percent in FY24H1, while headline inflation reached a decade high of 9.7 percent year-on-year in April 2024. Looking ahead, real GDP growth is projected at 5.4 percent in FY24, owing to the ongoing import compression and policy tightening, and will 1 Refer to the latest IMF Country Focus report as an illustration of the numerous vulnerabilities to climate change that Bangladesh faces, along with the innovative strategies it employs to address them. 2 SDR figures for the disbursed are converted at the market rate of U.S. dollar per SDR on the day of the Board approval. 2 pick up to 6.6 percent in FY25 as imports rebound and FX pressures ease. Infl