The IMF Working Papers series is designed to make IMF staff research available to a wide audience. With nearly 300 released each year, working papers cover a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
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
GDP growth, the exchange rate, commodity prices, and interest rates. It also analyzes
specific fiscal and institutional risks, such as those related to the pension system, the issuance
of guarantees, the state-owned commercial banks, and the external borrowing and debt
management strategy. The paper finds that fiscal aggregates are particularly sensitive to
shocks to commodity prices and exchange rates. Other factors that could affect fiscal
aggregates are the unfunded pension system and the limited institutional capacity.