IMF Satisfied with Bangladesh's Economic Stability

Economic Adviser Dr Salehuddin Ahmed has stated that the International Monetary Fund (IMF) has expressed satisfaction with the current stability of Bangladesh's economy. Key areas of IMF focus include raising the tax-to-GDP ratio, further stabilizing foreign exchange reserves, and reducing the fiscal deficit.

Following a meeting with an IMF delegation at the Secretariat on Sunday (April 6), the adviser spoke to reporters, highlighting the discussions.

"We are working toward implementing a uniform VAT rate, although it's not feasible to shift to a single rate all at once," he said.

He also mentioned that the IMF plans to release the fourth and fifth loan tranches together, pending a review. "Our current tax-to-GDP ratio is only 7 percent. We're exploring how to improve that, strengthen tax collection, and prevent administrative leakages."

According to Salehuddin, the IMF’s primary concerns are revenue generation, the size of the national budget, and managing the budget deficit. While he has had initial discussions, more detailed talks will take place with the National Board of Revenue (NBR) and Bangladesh Bank—particularly around tax administration and loan resolution issues.

He added that broader issues, such as discipline in the banking sector, recovery of defaulted loans, and enhancing the tax-to-GDP ratio through specific measures, were discussed in the preliminary meeting. "The IMF will hold discussions with all relevant stakeholders."

On the possibility of receiving the next tranches of IMF loans, Salehuddin expressed optimism. "They've said they will evaluate. Once the delegation departs, I'll visit on April 19, and further meetings are expected around May or June. Their recommendations will depend on the outcome of this review."

Responding to a question about IMF priorities for the upcoming loan disbursement, he reiterated their focus: "Increasing the tax-to-GDP ratio, stabilizing foreign reserves, and reducing the fiscal deficit."

"They acknowledged that Bangladesh's economy is now fairly stable, dynamic, and on the right track. However, they will take a deeper look during the review," he said.

"I made it clear that we are committed to doing whatever is necessary. We've already shown good intent, and we expect the same from their side. From there, we can move forward with further discussions," he concluded.