Ensure efficient public spending

The International Monetary Fund (IMF) has called for tax system reforms, the reduction of unjustified tax exemptions and more efficient public spending to address fiscal pressures in Bangladesh. It has also stressed the need to replace blanket subsidies with targeted social assistance for poor and vulnerable populations.

According to the IMF’s analysis, developing and emerging economies can increase revenue by expanding the tax base, modernising tax administration and reprioritising public expenditure. However, the Fund cautioned that tax reforms and subsidy restructuring should not place an additional burden on low-income people.

Meanwhile, Bangladesh government is shifting its economic strategy towards investment and partnership rather than relying on loans, Finance and Planning Minister Amir Khasru Mahmud Chowdhury said on Wednesday as the government seeks to attract capital, create jobs and strengthen the country’s economic resilience.

The government wants to reduce dependence on debt-financed development and encourage investment-led cooperation with international and bilateral partners. 

Discussions with China’s Exim Bank and representatives of the US Treasury have also focused on future economic cooperation, with Bangladesh emphasising investment and partnership over conventional lending.

These issues were highlighted at a press briefing on the Fiscal Monitor on the third day of the week-long IMF-World Bank Annual Meetings in Bangkok, the capital of Thailand.

The briefing featured Rodrigo Valdés, Director of the IMF’s Fiscal Affairs Department; Era Dabla-Norris, Deputy Director of the department; and Davide Furceri, Division Chief. Thilene Pavis Devahastin served as the communications officer.

The approach comes as Bangladesh engages with development partners on financing needs, energy-related economic pressures and reforms during the third day of the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group.

The meetings, being held in Bangkok from October 12 to 18, have brought finance ministers, central bankers and development officials together to discuss global growth, financial stability, debt sustainability and investment. 

For Bangladesh, the immediate priority is to secure financing that supports economic stability while expanding opportunities for private investment. 

The government is seeking World Bank support to manage rising energy costs and external economic pressures, while discussions are also underway on a possible new IMF programme.

Bangladesh has been exploring additional World Bank financing of around $10 billion over three years, alongside a new Country Partnership Framework to align development assistance with national priorities.

The proposed support is intended to help the country navigate economic pressures and strengthen its capacity to sustain growth. The amount and terms remain subject to discussions. 

The government is also seeking to improve the effectiveness of development spending. Faster project approval and implementation, stronger public financial management and reforms in the banking sector are among the areas receiving attention in discussions with development partners.

Reducing the time required to approve and implement projects is particularly important for Bangladesh, where delays can raise costs and postpone the benefits of infrastructure and public investment. The government wants international financing to translate more quickly into productive capacity, jobs and improved services.

Private capital mobilisation is another major theme of this year's meetings. The World Bank Group's programme on October 14 includes a flagship event titled Mobilizing Private Capital for Jobs, reflecting the growing emphasis on attracting private investment to support employment and development. 

The government is simultaneously discussing a possible new lending arrangement with the IMF. Such a programme could help meet external financing needs and support economic reforms, but its size, conditions and timeline have yet to be finalised. The government's stated preference for investment-led development does not rule out borrowing; rather, it points to a desire to make external financing more supportive of sustainable growth.

The global discussions in Bangkok are taking place against a backdrop of high energy prices, rising public debt and uncertainty over the economic outlook. On Wednesday, the IMF's programme included a briefing on its Fiscal Monitor, which examines public finances and fiscal risks. The issues are particularly relevant for developing economies facing expensive borrowing and competing demands for public spending. 

For Bangladesh, the challenge is to balance immediate financing needs with longer-term reforms that make the economy less dependent on external borrowing. Attracting investment, improving the efficiency of public spending and strengthening institutions will be essential to turning international cooperation into jobs, exports and sustainable economic growth.

The government’s message at the Bangkok meetings is that development finance should go beyond providing loans and help create conditions for greater investment and productive economic activity.

Besides this, the US Treasury Department has assured Bangladesh of its full cooperation in maintaining economic stability and addressing the country’s ongoing economic challenges. 

The Bangladesh government expects to receive further progress and assurances regarding the assistance within the next two to three months.

Prime Minister’s Economic Adviser Dr Rashed Al Mahmud Titumir disclosed the development after a meeting between the Bangladesh delegation and US Treasury Department officials in Bangkok on Wednesday morning.

Titumir said the IMF, the World Bank and the US Treasury Department had agreed that the current government had inherited the country’s existing economic challenges, including high inflation.

According to him, the development partners believe the government is working sincerely to address the problems. Against this backdrop, they have expressed their willingness to support Bangladesh in maintaining economic stability and tackling the ongoing crisis.