Bangladesh is hopeful of securing the fourth and fifth tranches of the International Monetary Fund (IMF) loan, said Finance Adviser Dr Salehuddin Ahmed. Talking to reporters after a meeting with the visiting IMF delegation in Dhaka on Sunday, Dr Ahmed said the IMF has acknowledged Bangladesh’s economy to be on the right track. “Our discussions with the IMF primarily centred around the country’s tax system. Bangladesh’s tax-to-GDP ratio stands at only 7 percent and the IMF has emphasised the need for increasing it. There was also significant discussion regarding administrative measures within the revenue sector. The IMF is seeking further clarity on the upcoming national budget and the projected fiscal deficit,” he said. IMF team to begin discussions Sunday on $4.7 billion loan tranches Following the meeting with the Ministry of Finance, the IMF is expected to hold in-depth discussions with the National Board of Revenue (NBR) on tax-related matters, the adviser said. Apart from the tax structure, he said, the IMF had also initiated preliminary talks on the banking sector. “The IMF enquired about the steps Bangladesh has taken to restore discipline in the banking sector, particularly concerning the recovery of defaulted loans. We informed them that a new legal framework is being developed to facilitate loan recovery. The IMF will discuss the matter further with Bangladesh Bank.” IMF's 4th tranche deferred again, this time to June The IMF delegation, currently in Dhaka, will continue discussions with various financial institutions over a two-week period starting from 6 April. After the conclusion of these talks, a decision regarding the disbursement of the remaining $2.39 billion is expected around May or June, Dr Ahmed told the journalists.  

The delegation from the International Monetary Fund (IMF) will start discussions on Sunday to review updated financial data before releasing the next tranches of the $4.7 billion loan. According to the Finance Division of the Ministry of Finance, the IMF team will visit Dhaka to assess the conditions for releasing the fourth and fifth tranches. The delegation will meet various government departments over the course of two weeks, starting from Sunday. The team is expected to arrive in Dhaka this (Saturday) evening. During their visit, IMF team members will engage with the Finance Division, National Board of Revenue (NBR), Power Division, Power Development Board, Bangladesh Energy Regulatory Commission (BERC), and the Energy and Mineral Resources Division. The IMF team will hold a press briefing on April 17. On both the first and last days of their visit -- April 6 and April 17 -- the IMF delegation will meet Finance Advisor Dr Salehuddin Ahmed. Bangladesh moves up one step in global passport strength index Bangladesh has already received three tranches since the loan program began on January 30, 2023. The country received $476.3 million in the first tranche on February 2, 2023, $681 million in the second tranche in December 2023, and $1.15 billion in the third tranche in June 2024. In total, Bangladesh has received about $2.31 billion from these three tranches, leaving the fourth and fifth tranches, totalling $2.39 billion, still pending. Meanwhile, in a pre-budget discussion with the Economic Reporters’ Forum (ERF), Finance Advisor Dr Salehuddin Ahmed emphasised the importance of the IMF loan for budgetary support. He said the government and the IMF have agreed to release the two installments for the fiscal year 2024-25 together. But sources indicate that there are three key obstacles preventing Bangladesh from receiving both installments of the IMF loan simultaneously: making the currency exchange rate a market-based one, raising additional revenue equal to 0.5% of GDP, and separating the revenue administration from the NBR's revenue policy.

The release of the fourth tranche of Bangladesh’s $4.7 billion budget support loan from the International Monetary Fund (IMF) has been deferred until March, primarily due to scheduling adjustments caused by natural disasters. A senior official at Bangladesh Bank (BB) told to UNB that the matter was initially set for discussion in the IMF executive board meeting on February 5. But the meeting has been postponed, with the new date set for March 12. The IMF's month-long closure of activities, prompted by natural disasters, is cited as the main reason behind the change in the schedule. The global lender has emphasised several conditions tied to the loan's release. One critical demand is the liberalisation of the US dollar exchange rate, which the central bank is reportedly aligning with market trends. US delegation with focus on workers' rights visits BGMEA Another major point of contention relates to revenue collection targets set for the National Board of Revenue (NBR). While IMF officials have raised concerns regarding these targets, an NBR source has stated that measures to enhance revenue collection are already underway and there are no significant hurdles from their side. The fourth tranche, amounting to $645 million, follows three previous installments under the loan program. BFIU prepares to recover Tk 15,000 crore from seized accounts Meanwhile, Bangladesh has requested an increase of $750 million in the overall $4.7 billion package. The IMF has agreed to this request but has set strict conditions, including increased revenue collection and structural changes like separating tax collection from policy-making.

The decision to raise VAT and taxes on various products has been taken to boost government revenue rather than to meet International Monetary Fund (IMF) conditions, Finance Adviser Dr Salehuddin Ahmed said on Thursday. Speaking to journalists after a meeting of Advisers Council Committee on Government Purchase at the Secretariat, the adviser said the adjustments were necessary to fill revenue gaps created by significant tax exemptions on certain goods. Salehuddin Ahmed said that the hike in VAT on 43 items would not affect the prices of essential commodities or burden ordinary citizens. He said that higher taxes have been imposed on luxury items, such as three-star and higher-rated hotels, while sparing establishments of standard quality. "The objective is to ensure a balanced revenue collection system that does not inconvenience the general population," he said. IMF again eases foreign exchange reserve target for Bangladesh The adviser, however, expressed optimism about economic stability in the coming year, adding that banks would receive sufficient support to maintain liquidity. "We aim to allocate increased budgetary resources to education and health, strengthening these vital sectors," he said. The proposal, which has been sent for presidential approval, will be implemented through an ordinance once authorised. While the adjustments target luxury goods, concerns persist regarding their potential impact on the broader economy.

The interim government will not increase power tariffs despite a recommendation from the International Monetary Fund (IMF), said Power and Energy Adviser Dr. Fouzul Kabir Khan on Thursday. "We will not raise power tariff despite IMF’s suggestion," Dr. Fouzul told reporters after a meeting with an IMF delegation at the Finance Ministry. The delegation, led by IMF Mission Chief to Bangladesh Chris Papageorgiou, held a meeting as part of the IMF’s third review under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF). Finance Adviser Dr. Salehuddin Ahmed and Dr. Fouzul were present during the discussions. Govt prioritises timely textbook distribution: Education Adviser The energy adviser explained that while the IMF recommended a tariff hike to ease the subsidy burden in the power sector, the government emphasized the adverse effects such a move would have on citizens already grappling with high inflation. The government is focusing on reducing subsidies by cutting production costs in the energy sector, the adviser said. Old, polluting buses in Dhaka to be scrapped to combat air pollution: Rizwana He also highlighted several reforms aimed at improving efficiency and transparency in the power sector. The government has repealed the Speedy Increase of Power and Energy Supply (Special Provision) Act, 2010, and removed bureaucrats from the boards of directors in various power companies, he noted.

The visiting International Monetary Fund (IMF) delegation has advised Bangladesh Bank to disclose detailed and complete information regarding bad and risky loans fin the public interest. Meeting sources said that the visiting IMF delegation gave this suggestion in the meeting held with the BB officials on Sunday (April 28).  In the meeting, the IMF asked to make the financial health of the banks and the inspection report open to the customers. At the same time, it urged to increase the number of inspections to prevent irregularities-corruption and loan scams. Officials concerned in the meeting said that bad loans or risky assets are increasing in banks due to various irregularities including big loan scams. Several banks have weakened which also acknowledged by the BB Governor.  Therefore, the IMF believes that the deposits of those banks which are in trouble are also at risk. In such a situation, the global lender suggested that the banks should disclose the full report of risky assets to the customers.  Read more: DUJ, DRU, TIB condemn ban on journalists entering Bangladesh Bank According to the IMF Officials, “If these reports are published, the customers will be able to make informed decisions about keeping their deposits.” In the meeting, the IMF sought to know whether the central bank's inspection of banks' financial health is continuing or not. Clarification has also been sought as to whether inspection reports are disclosed to customers or not.  In addition, the IMF delegation suggested increasing the quality and number of inspections to prevent irregularities, corruption and loan scams, sources said. When asked about the meeting with the BB, the executive director and spokesperson of the BB Mesbaul Haque said that the meetings with the IMF are ongoing. This meeting will be held step by step till May 8. He did not agree to make any comment other than that and said the details will be given in future. Read more: Islamic Banking in Bangladesh: Commendable contribution to the country’s economic growth

Bangladesh's Finance Ministry is tackling what it identifies as one of its most formidable challenges: significantly amplifying public expenditure to catalyse sustained growth within the private sector.  An official document from the ministry underscores that, in comparison to other economies, Bangladesh's government spending as a percentage of GDP markedly trails, thereby emphasising the urgency to augment investment. Data from the World Economic Forum and the IMF (as of April 2023), reveal Bangladesh's public expenditure at 13.1% of its GDP, a figure that stands in stark contrast to countries like France at 58.5%, Sweden at 46.8%, and even neighbouring India at 28.8%. This discrepancy highlights the room for growth in Bangladesh's fiscal strategy. The government, aiming to elevate GDP growth and living standards, views the expansion of its expenditure as crucial. This ambition is supported by the progressive implementation of reforms in Public Financial Management. Historically, the government has gradually increased its spending relative to GDP, signaling a positive trajectory. Interest rate for April set at 13.55%, for consumer loans add 1%   Outlined in the 'Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26)' from the Finance Division, the government's medium-term strategy is geared towards securing inclusive and high growth. This strategy is aligned with Bangladesh's Vision 2041, the 8th Five Year Plan, and the Sustainable Development Goals (SDGs), focusing on priority sectors including infrastructure, industrial production, food security, job creation, healthcare, and education among others. In anticipation of the demands of the Fourth Industrial Revolution (4IR), significant allocations have been dedicated to human resource development, particularly in education and skills training. The fiscal projections set public expenditure targets at 15.2% for the 2023-24 fiscal year, 15.4% for 2024-25, and 16.2% for 2025-26. The document further highlights Bangladesh's progression to a lower-middle-income country, with aspirations to attain upper-middle-income status by 2031. This ambition aligns with the developmental targets set within the 8th Five Year Plan and reflects the government's commitment to resuming the rapid economic growth witnessed pre-COVID-19 and pre-Russia-Ukraine war. Banks to remain open on April 5, 6, and 7 for payment of garment workers’ salary, bonus In response to the COVID-19 pandemic, the government prioritised life and livelihood protection, adopting an expansionary fiscal policy and channeling additional funds into critical sectors.  Despite the global political and economic instability, these measures have begun to show promise, with expectations of returning to pre-pandemic growth levels and policies aimed at promoting pro-poor and inclusive growth. As Bangladesh looks forward, the Finance Ministry is set on formulating strategies to enhance pro-poor growth, stimulate both domestic and international private investment, bolster public investment, curb inflation, generate employment, and alleviate the balance of payment pressures. These objectives underscore a holistic approach to not only recovering from recent global challenges but also setting a solid foundation for long-term, sustainable development.

The International Monetary Fund (IMF) has sounded an alarm, indicating that nearly 40% of global employment could be endangered by the burgeoning influence of artificial intelligence (AI). This stark warning, reported by CNN, underscores the seismic shifts anticipated in the global job market. IMF Chief Kristalina Georgieva, in a recent blog post, stressed the critical necessity for governments worldwide to fortify social safety nets and roll out comprehensive retraining programmes. This proactive approach aims to mitigate AI's potentially dramatic effects on employment. Davos 2024: Can AI provide solutions, as Global leaders confront $88.1 trillion debt crisis? Highlighting a key concern, Georgieva pointed out the potential for AI adoption to aggravate existing inequalities, a trend that requires immediate policy intervention to avert escalating social tensions. This issue is set to be a central theme at the upcoming annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, where AI's role in the economy will be a focal point. According to the IMF's analysis, advanced economies might witness the most significant impact, with up to 60% of jobs at risk. Although AI promises to enhance productivity in about half of these roles, the remainder faces a stark reality of diminishing demand, lowered wages, and potential unemployment as AI assumes roles traditionally held by humans. UN chief warns of risks of artificial intelligence Emerging markets and lower-income countries are not immune to these challenges. Here, 40% and 26% of jobs, respectively, may feel the impact. Georgieva raised concerns about these regions' lack of infrastructure and skilled workforces, factors that intensify the risk of AI deepening existing economic divides. Georgieva also warned of an escalating risk of social unrest, especially if younger, tech-savvy workers leverage AI for productivity gains, leaving their older counterparts struggling to adapt. China warns of artificial intelligence risks, calls for beefed-up national security measures At Davos, the implications of AI on employment are a key discussion topic. Prominent figures, including Sam Altman, CEO of ChatGPT-maker OpenAI, and Microsoft's Satya Nadella, are slated to address the impact of generative AI technologies. Despite these challenges, Georgieva did not overlook AI's positive potentials, noting its capacity to significantly boost global output and incomes. She argued that with thoughtful planning, AI could be a transformative force for the global economy, stressing the importance of channeling its benefits for the collective good. Amidst concerns over job displacement, some economists are optimistic, suggesting that AI's widespread adoption may ultimately enhance labor productivity. This could potentially lead to a 7% annual increase in global GDP over the next decade.

Despite relaxed conditions for net reserves by the International Monetary Fund (IMF), Bangladesh could not meet the foreign exchange reserves target at the end of 2023. According to the IMF loan documents, the actual reserves were supposed to be USD $17.78 billion at the end of December 2023. However, as the year ended, the actual reserves stood at about $16.75 billion. Not much difference between political parties' views on energy situation: CPD Bangladesh Bank could not meet the reserves target as per IMF conditions by September-end as well. Later, the global lender reduced the reserves conservation target at the request of Bangladesh. Even the revised target could not be achieved by the end of December 2023. According to IMF's new conditions, the real reserves are expected to be $19.26 billion in March and $20.10 billion in June 2024. However, financial sector stakeholders cannot determine whether this goal will be achieved. The real reserve is the reserve that is calculated after excluding the SDR of the IMF, the dollars kept as foreign exchange clearing by the banks, and the dollars deposited for the Asian Clearing Union (ACU) bills. Apart from this, there are two other accounts of reserve. One of them is total reserve. Another IMF accounting system is reserves maintained under BPM6. At the end of the year 2023, total forex reserves increased to $27 billion. However, what the IMF considers is only net or real reserves. Md Mezbaul Haque, spokesperson and executive director of Bangladesh Bank told UNB that the central bank worked to keep the reserves above $17 billion, as per the IMF-set target. Former IMF economist Dr Ahsan H Mansur told UNB that it is unexpected that the IMF-set target could not be met even after reducing the previous target. Habiganj-2: JaPa candidate withdraws from election citing 'lack of fair environment' He also doubted that Bangladesh Bank will be able to maintain IMF’s foreign exchange reserves target in March 2024, if the central bank does not change its policies.

Bangladesh’s foreign exchange reserves continued to fall with the usable reserves standing now at USD $ 15.82 billion as per IMF guideline, according to banking sources familiar with the development on Tuesday (November 28, 2023). During the period of the COVID-19 pandemic two years ago, the reserves had soared to $48 billion, thanks to greater inflow of remittances amid reduced import demand. The reserves started decreasing since the eased import restrictions and impact of the Russia-Ukraine war. Also read: Forex reserves below $20 billion after paying ACU The latest foreign exchange report of Bangladesh Bank (BB) revealed that the country's reserves on 23 November stood at $19.52 billion based on the IMF formula (Balance of Payments and International Investment Position Manual) or BPM6. As per the formula, the net reserves will be $3.7 billion less than the total reserve amount, the BB sources said. The BB spokesperson Mezbaul Haque in this regard told UNB that foreign exchange from reserves is spent and deposited every day. Also read: IMF relaxes forex reserve and revenue targets for $4.70 billion loan It is a continuous process of a country, he said advising common people not to panic at the news of decreasing foreign exchange. In July, Bangladesh started calculating its foreign reserves according to a formula suggested by the International Monetary Fund – BPM6. Following the new calculation, Bangladesh's gross foreign exchange reserves that time dropped by $26.44bn to $23.56bn. Also read: Bangladesh stands on the edge of deep ditch before the polls: Dr Debapriya