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Assessing Fiscal Risks in Bangladesh

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  • Leandro Medina

    (International Monetary Fund, Washington, DC, United States. Author email: lmedina@imf.org)

Abstract

This paper identifies, quantifies, and assesses fiscal risks in Bangladesh. By performing sensitivity analysis and using stochastic simulations, it measures risks arising from shocks to gross domestic product growth, the exchange rate, commodity prices, and interest rates. It also analyzes specific fiscal and institutional risks, including those related to the pension system, issuance of guarantees, state-owned commercial banks, and external borrowing and debt management strategies. The paper finds that fiscal aggregates are particularly sensitive to shocks to commodity prices and the exchange rate. Other factors that could affect fiscal aggregates are the unfunded pension system and limited institutional capacity.

Suggested Citation

  • Leandro Medina, 2018. "Assessing Fiscal Risks in Bangladesh," Asian Development Review, MIT Press, vol. 35(1), pages 196-222, March.
    • Handle: RePEc:tpr:adbadr:v:35:y:2018:i:1:p:196-222
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    Cited by:

    1. World Bank, 2015. "Bangladesh Public Expenditure Review Update," World Bank Publications - Reports 22673, The World Bank Group.

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    More about this item

    Keywords

    Bangladesh; commodity prices; contingent liabilities; exchange rate; fiscal risks; guarantees; pensions; sovereign debt;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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