DHAKA, Oct 7 (Reuters) - Bangladesh's economic growth is expected to slow to less than 6 percent in the year to June 2014 from 6 percent the previous year because of unrest and political uncertainties in the run-up to elections, the International Monetary Fund said.
Bangladesh has been rocked by a spate of violent protests and counter protests since February on issues ranging from war crimes trials to election rules to hold polls, due next January.
A stand-off between Prime Minister Sheikh Hasina and her arch rival former premier Begum Khaleda Zia over whether to install a caretaker authority to ensure a free and fair election could plunge Bangladesh into a fresh cycle of violence - or there could be a repeat of 2007, when the army stepped in and formed a provisional government.
"Unrest and political uncertainty in the run-up to elections are affecting economic activity by disrupting supply and curbing investment appetite, with real GDP growth now expected to moderate below 6 percent in the fiscal year 2014," the IMF said in a statement following a Sept. 22-Oct. 6 visit by an IMF mission to conduct a loan review.
In June, the IMF disbursed $139.4 million to Bangladesh as the third tranche of a three-year, $975.9 million loan deal to help tackle budgetary pressures. The fourth tranche is expected in early December.
The mission also praised the government's reform plans - in coordination with development partners, business community, labour unions and international buyers - to improve the working conditions and strengthen the safety standards for workers in Bangladesh.
Bangladesh's $20 billion garment industry, which supplies many Western brands, has been under a spotlight after a series of deadly incidents including the collapse of a building housing factories in April that killed more than 1,130 people.
Reporting by Ruma Paul; Editing by Kim Coghill