IMF calls for reforms to ensure strong growth

Bangladesh needs to pursue ambitious policies and structural reforms to maintain macro-financial stability and promote strong, inclusive, and job-rich growth, said Krishna Srinivasan, director of the Asia Pacific Department at the International Monetary Fund (IMF).

He made the remarks at the conclusion of an IMF delegation’s visit to Dhaka on March 24-25, the first engagement since the general elections on February 12, reads a press release

During the visit, he met Prime Minister Tarique Rahman, Finance Minister Amir Khosru Mahmud Chowdhury, and Bangladesh Bank Governor Md Mostaqur Rahman.

“We had productive discussions with Prime Minister Rahman and other key policymakers on the economic and financial challenges facing Bangladesh,” Srinivasan said.

He added, “The IMF remains a steadfast partner in supporting Bangladesh and its people and stands ready to assist the country in the pursuit of sustained stabilisation and growth that benefits all Bangladeshis.

“The IMF team will continue its dialogue with Bangladesh’s authorities during the upcoming IMF-World Bank Spring Meetings in April to identify the best path forward to engage on the Fund-supported programme.”

On the first day of the visit, March 24, Srinivasan made a courtesy call on the prime minister at the Secretariat in Dhaka. Finance Minister Chowdhury was also present. The discussions focused on the country’s reform agenda and economic challenges amid global uncertainty and geopolitical tensions.

Talks have also resumed on the stalled $5.5 billion IMF loan programme approved in January 2023, which has been on hold since the fifth review in November last year.

Bangladesh may receive a $1.3 billion tranche by June if it advances key reforms, including moving towards a more market-based exchange rate, strengthening revenue mobilisation, reducing subsidies, and addressing vulnerabilities in the banking sector.

Two instalments were released together in June last year, bringing the total received so far to $3.6 billion.

Speaking to reporters after a separate meeting with the finance minister, Srinivasan said discussions with Bangladesh are mainly focused on policy measures.

“Our engagement this morning with the minister was centred on policies,” he said, adding that IMF financing is fundamentally based on policy dialogue.

He said that Bangladesh, like many other countries, faces uncertainty due to global developments but reaffirmed the IMF’s continued support.

The delegation also met with the central bank governor to discuss the technical aspects of the ongoing reform requirements.