<i>Praises for the economy </i>

Naoyuki Shinohara, deputy managing director of International Monetary Fund, has tipped Bangladesh's economy to slow only moderately this fiscal year.
The uncertainty surrounding the elections, however, could hinder the economy, Shinohara said.
He particularly praised the resilience showed by the country in the face of global slowdown and the stabilising measures the government has taken.
He made recommendations to further consolidate the economy.
His statement in detail:

Macroeconomic pressures have eased in Bangladesh, aided by stabilisation measures aimed at containing government borrowing, reducing the inflation rate and building foreign reserves.
While the global economic situation remains fragile, Bangladesh's economy continues to show resilience, with growth this fiscal year expected to slow only moderately. However, risks remain to the downside, mainly arising from a slowdown of exports to mature markets, spike in world commodity prices, further deterioration in state bank finances and election-year uncertainty.
Going forward, firm implementation of the ECF-supported programme is necessary to consolidate gains made thus far, maintain fiscal and debt sustainability, reduce vulnerabilities and achieve higher and sustainable growth.
Fiscal policy has remained broadly on track, but underperforming tax collections, related mainly to the trade slowdown, require upfront actions to broaden the tax base and strengthen enforcement.
Over the medium term, the new value-added tax is expected to increase revenues and guide tax modernisation. Subsidy costs still weigh large on public finances.
Continued vigilance is needed to contain energy and fertiliser related outlays, while improving the reach of safety nets, all with a view to creating more space for growth-critical development spending. The government's debt management strategy should focus on utilising concessional and selective nonconcessional borrowing to ensure debt sustainability.
Bangladesh Bank's monetary policy has helped reduce credit growth and inflationary pressures, but recent easing, while modest, should proceed further only when macroeconomic and financial stability is firmly established. Policy effectiveness will be enhanced by continued exchange rate and interest rate flexibility.
Structural reforms have moved forward. However, greater coordination is required in reaching internal policy consensus to avoid delays.
The new VAT law is a landmark, but its timely implementation will require careful planning and support, foremost in tax automation.
Banking law amendments, aimed at strengthening financial sector governance, should also move forward to keep risks in check, especially those arising from the state-owned banks.
Other envisaged reforms in revenue administration, public financial management, and foreign controls are all aimed at boosting public and private investment, in order to accelerate growth and further reduce poverty.
Looking ahead, achieving a stable, growth-supportive environment and mitigating risk factors necessitate a further strengthening of policy buffers in 2013, supported by strong economic governance and manageable debt levels.
Timely actions will allow Bangladesh to reap full gains from a global recovery.