The International Monetary Fund (IMF) is pressing Bangladesh to fix its troubled banking sector, raise tax revenue and maintain tight monetary conditions to contain inflation as the government negotiates a new lending programme.
The demands featured in discussions at the IMF-World Bank annual meetings in Bangkok on Thursday, after which Finance and Planning Minister Amir Khosru Mahmud Chowdhury told journalists that Bangladesh agreed with most of the Fund’s observations but wanted flexibility over implementing reforms.
Speaking after a meeting with IMF Deputy Managing Director Nigel Clarke, Chowdhury said the lender had raised concerns about banking-sector weaknesses, the low tax-to-gross domestic product (GDP) ratio and economic stability.
He described the discussions as positive, saying several concerns had already been addressed and negotiations on a new programme would continue over the coming months.
The IMF was satisfied with progress made since the budget, considering the economy inherited by the government and the effects of global conflicts, the minister said.
Earlier, IMF Asia and Pacific Department Deputy Director Sonali Jain-Chandra described Bangladesh’s financial sector as “very weak” and called for a credible strategy to restore stability.
She said tight monetary conditions remained necessary to curb persistent inflation, although monetary tightening alone would not resolve the country’s economic problems.
Revenue mobilisation was another major concern, with Bangladesh’s revenue-to-GDP ratio falling to around 7 per cent, among the lowest in the world.
The Fund stressed that stronger revenue collection was essential to finance development spending and support financial-sector reforms.
Against that backdrop, Prime Minister’s Adviser on Finance and Planning Rashed Al Mahmud Titumir said the government aimed to raise tax collection to 10 per cent of GDP by 2030.
Speaking with journalists separately in Bangkok, Titumir said the IMF, World Bank and other development partners had expressed willingness to support reforms based on Bangladesh’s priorities rather than externally prescribed approaches.
“For the first time, international development partners are clearly expressing their willingness to support reform initiatives based on Bangladesh’s priorities,” he said.
The government is seeking financing from the IMF, World Bank, Asian Development Bank (ADB), Islamic Development Bank (IsDB) and relevant Chinese and US institutions to implement its economic recovery programme.
Titumir said discussions on financing would follow established procedures, expressing optimism about progress over the next two to three months.
The government’s agenda includes restoring banking discipline, protecting depositors, improving financial transparency and strengthening accountability.
Titumir said measures were under way to return deposits to customers of Sammilito Islami Bank, alongside efforts to improve transparency in banks’ financial statements and reform relevant laws.
He alleged that around $40 billion had been looted from the banking sector, leaving ordinary people to bear the consequences. He called for accountability for those responsible and anyone who facilitated financial wrongdoing, whether in Bangladesh or abroad.
Tackling defaulted loans and financial irregularities would require coordinated action, he added.
Beyond banking reforms, the government is seeking international support to strengthen social protection and reduce the impact of inflation on vulnerable households.
Titumir acknowledged shortcomings in previous welfare programmes, saying flawed beneficiary selection had excluded eligible households while allowing others to receive benefits.
To address those weaknesses, the government is pursuing Family Card and Farmers Card initiatives, supported by digital public infrastructure to improve beneficiary identification and benefit delivery.
Development partners had responded positively to the government’s target of allocating 5 per cent of GDP to the social sector and increasing healthcare spending, he said.
Inflation remains a pressing concern, particularly as the Middle East conflict threatens to push up fuel prices, transport costs and the prices of essential commodities.
Titumir said protecting low-income households from rising living costs remained a central government priority.
The reform programme, incorporated into the government’s election manifesto, will also form part of its forthcoming five-year economic strategy.
Chowdhury said negotiations with the IMF would continue until the two sides reached agreement on the remaining issues, with programme conditions to be addressed through dialogue.
