Reforms under IMF programme to be phased in: finance minister

Reform programmes will be implemented gradually under the International Monetary Fund’s (IMF) new loan programme, keeping in tandem with political realities, Finance Minister Amir Khosru Mahmud Chowdhury said today.

No major change is possible overnight, and the IMF has expressed its agreement on this matter, he said.

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Chowdhury made the comments while talking to journalists at his office at the secretariat after a meeting with the visiting IMF delegation in Dhaka.

He said the IMF delegation has shown respect for the government's financial reforms and political accountability.

A fact-finding mission led by Ivo Krznar, the IMF’s mission chief for Bangladesh, came to Bangladesh and held discussions with the Bangladesh Bank, the finance ministry and other relevant agencies.

Discussions were held with the IMF regarding the foundation and sequencing of Bangladesh's upcoming new programme, as well as the overall aspects of the policy, according to a press release issued by the finance ministry.

The minister said the foundation on which the new programme with the IMF will operate has been clarified, and both sides have fully agreed on the proposed framework.

He said that, considering the country's overall economic situation, the changes will be implemented progressively based on the priority of the reforms needed. The IMF has agreed to this principle of sequencing.

Furthermore, the IMF has shown special respect for the welfare-oriented accountability and responsibility of a political government.

Economic decisions will be taken while keeping the interests of the country's people intact, he said.

The minister said the IMF delegation expressed satisfaction with the visible progress made during the current government's four-month tenure in financial sector reforms, the development of the stock and capital markets, and revenue collection.

For the first time in the country's history, tax collection within just four months was highlighted as a major achievement. Positive discussions were held regarding the government's proposals to further increase the tax-to-GDP ratio by maintaining this positive trend.

Regarding subsidies, the minister clarified that specific details or conditions have not yet been discussed.

The discussions were primarily focused on creating the core foundation of the new programme. All matters will be taken up later during detailed discussions.

The minister further said that the discussions are an ongoing process. The next round of discussions will take place during the annual meetings of the World Bank and the IMF in September or October.

The IMF is satisfied with the current government's reform-oriented performance, and the upcoming new programme will be finalised on this foundation.