Bangladesh confident about getting $4.5bn IMF credit: Finance secretary

Finance Secretary Fatima Yasmin has said that she is confident that Bangladesh is going to get $4.5 billion International Monetary Fund credit to be meant for supporting the country’s budget.

“We are confident about getting a $4.5 billion credit from the global lender the International Monetary Fund (IMF) for supporting our Budget,” she said.

Fatima told swarms of journalists at her secretariat office following a meeting with the IMF’s 10-member staff mission headed by the organisation’s Asia and Pacific Division, Rahul Anand.

The delegation held several meetings with the Macroeconomic Wing, Treasury Bond Management Division, and Budget Wing of the finance ministry.

In the backdrop of higher inflation, declining export receipts and consistent import bills, Bangladesh started the dialogue with the IMF to solicit a budget-supporting loan worth $4.5 billion.

An official who attended the meeting said, “The government may not accept the loan from the global lender if conditions are not matched with our present economic situation.”

He claimed that Bangladesh’s economic strength is better than before and the government may decline securing IMF credit if strings get harsh.

Regarding reduction of budget subsidies, the official said, “We have already started trimming subsidy outlays proposed in the budget to comply with the IMF. Such initiatives will continue in the next couple of years”.  

The subsidies for the 2022-23 fiscal year have been increased by Tk 15,920 crore to Tk 82,745 crore, which is 1.9% of the country’s GDP.

In October, State-run Bangladesh Power Development Board (BPDB) sought around a 66-percent hike in bulk electricity tariffs on the pretext of Bangladesh Energy Regulatory Commission’s raising of natural gas tariffs and hike in oil prices in line with the international market.

The BERC hiked natural gas tariffs by 22.78 percent on average with effect from June 2022 following public hearings. The new weighted average natural gas tariff is now Tk 11.91 per cubic metre, up by Tk 2.21.

In August, the government also raised fuel oil prices by as much as 51.68%.