IMF endorses Bangladesh’s reform roadmap

Finance Minister Amir Khosru Mahmud Chowdhury on Monday said Bangladesh’s reform agenda under a proposed new loan programme with the International Monetary Fund (IMF) would be implemented gradually, taking into account the country’s political and economic realities.

He said sweeping reforms could not be introduced overnight and noted that the IMF had agreed with the government’s phased approach.

The minister made the remarks while speaking to reporters at his office at the Secretariat after a meeting with a visiting IMF delegation.

An IMF fact-finding mission, led by the Fund’s mission chief for Bangladesh, Ivo Krznar, is currently in Dhaka holding discussions with the Ministry of Finance, Bangladesh Bank and other relevant agencies.

According to a Finance Ministry press release, the talks focused on the framework and sequencing of Bangladesh’s proposed new IMF-supported programme, as well as the overall policy direction.

“The foundation on which the new programme will operate has now been clarified, and both sides have reached full agreement on the proposed framework,” Chowdhury said.

He said the reform measures would be introduced progressively, with priority given to the most pressing areas in light of the country’s overall economic situation.

According to the minister, the IMF has endorsed this approach to sequencing reforms.

Chowdhury also said the IMF had acknowledged the government’s emphasis on balancing financial reforms with political accountability and public welfare.
“Economic decisions will be taken while protecting the interests of the country’s people,” he said.

The finance minister said the IMF delegation expressed satisfaction with the progress made during the current government’s first four months, particularly in financial sector reforms, the development of the stock and capital markets, and revenue collection.

He said the IMF had recognised the government’s tax collection performance over the past four months as a significant achievement and welcomed discussions on proposals to further raise Bangladesh’s tax-to-GDP ratio by sustaining the current momentum.

On the issue of subsidies, Chowdhury said no specific conditions or detailed discussions had yet taken place.

“The discussions so far have focused primarily on establishing the core foundation of the new programme. Detailed issues will be addressed during subsequent negotiations,” he said.

The minister described the discussions as an ongoing process, adding that the next round of negotiations would take place during the annual meetings of the World Bank and the IMF, scheduled for September or October.

He said the IMF viewed the government’s reform agenda positively and that the proposed new programme would be built on the progress achieved so far.