Finance Minister Amir Khosru Mahmud Chowdhury has expressed optimism about reaching a fresh loan agreement with the International Monetary Fund (IMF), citing progress in negotiations following several meetings. Further discussions are scheduled over the next two days.
Speaking on the opening day of the IMF-World Bank annual meetings in Bangkok today (12 October), the minister said the differences between the two sides were limited.
“We are certainly optimistic about securing a new loan,” he said, adding that the IMF and the World Bank held broadly similar positions on most issues.
“There are one or two areas where differences remain, and we are considering those according to the sequence of priorities,” he said, expressing hope that an understanding would be reached.
On talks with the World Bank, Khosru said the government was negotiating a partnership framework agreement to help protect the economy from high international oil and gas prices.
A World Bank team will visit Bangladesh for further discussions. The proposed agreement would go beyond project financing to help the country manage the economic fallout from volatility in global energy markets.
A Bangladeshi delegation led by Khosru met IMF officials in Bangkok this morning as the government seeks to reassess its engagement with the lender and explore alternative sources of financing.
Bangladesh’s move to seek a new arrangement followed disagreements over the reform conditions attached to a $5.5 billion IMF loan programme secured under the previous administration. The BNP-led government has argued that some conditions do not adequately reflect the country’s economic realities or serve the public interest.
The main points of contention concern revenue mobilisation, taxation, subsidies and banking sector reforms. The IMF has called for the removal of tax exemptions, rationalisation of subsidies, greater exchange-rate flexibility and measures to strengthen the financial sector.
The government has raised concerns about the potential economic and social consequences of implementing some of these measures.
Bangladesh had received approximately $3.6 billion under the previous programme before seeking to suspend the arrangement and negotiate a new one. It has since pursued a fresh loan package worth around $4 billion to $4.5 billion, with reforms to be introduced in phases in line with the government’s priorities.
Khosru has maintained that Bangladesh will not accept conditions it considers contrary to national interests.
On 4 October, he said the government would seek to mobilise funds through domestic and international capital markets rather than remain heavily dependent on loans from the IMF, the World Bank and other development partners.
He estimated that Bangladesh would need around $50 billion annually to meet its development ambitions, including the goal of building a $1 trillion economy by 2034.
