Economy
Salehuddin vows to continue reforms in financial sector
Citing reforms in the revenue and banking sectors as two most important challenges before the country’s economy,
Adviser to the interim government on the Ministries of Finance and Commerce Dr Salehuddin Ahmed today vowed to continue such reforms.
“Immediately the challenges that lie before us are that revenue and banking sectors reform, the reforms in other sectors and political fronts will follow these,” he said.
The Finance Adviser was addressing at a discussion on the changes brought in direct taxation through Finance Act, 2024 at the Multipurpose Hall of the National Board of Revenue (NBR) in the capital’s Agargaon area today.
NBR Chairman Md Abdur Rahman Khan addressed the event with President ofBangladesh Civil Service (Taxation) Association M Lutful Azim in the chair.
Association Secretary General Sheikh Shamim Bulbul delivered the welcome speech while Tax Policy member AKM Badiul Alam and Tax Admin and Human Resource Management member GM Abul Kalam Kaikobad also spoke.
Commenting on the government’s efforts to bolster the financial sector reforms, he said, “We’re willing and serious in banking and revenue sector reforms and please supplement your (tax officials’) efforts in this regard…Please make fast.”
Mentionable, transparency and accountability should be the most important things, the adviser asked the tax officials to collect tax as much as possible for meeting the demands. “But, don’t collect tax through not putting pressure on the common people, not causing pain to them so that people become assured seeing you…And they come to pay tax voluntarily,” he continued.
He said now there is a tendency among common taxpayers that they would not come close to the tax officials to avoid harassment. “Please assure the taxpayers so that they could overcome such fear,” the finance and commerce adviser added.
Urging all concerned irrespective of their class and creed to take part in revenue generation, Dr Salehuddin, also in-charge of the Ministry of Science and technology, said: “We want to make the country self reliant…Although it’s not possible now to become cent percent reliant as we’ll have to still bring resources from abroad.”
He said apart from restoring the law and order situation, the biggest problem is the current economic condition.
The adviser said a visiting US-delegation will put priority on the economy while a series of discussions in this regard would take place in the next couple of days.
“They (USA) might help us according to our needs…At least we can say we’ve started the tax reforms, motivating the officials…Then they might be assured to some extent….” he added.
The Finance Adviser noted some people have become restless to some extent over the last one month of the interim government to see the performances adding: “But, I can say at least in the financial sector, some visible steps have been taken like scraping the provision for whitening the black money, reforms are being taken place in the banking sector.”
He went on saying, “We’ve already made the start and we’ll aspire to attain our desired target with the help of yours… Reforms in health, social sectors will take some time.”
Noting that the first principle of the government should be not to make any wastage of public funds, he said the government would not reduce the target for realizing revenues.
“We’ll try to meet all the needs and expenditures through arranging resources of our own. But, it’s also true that our own resources alone will not only work, but also external funding is needed apart from technical assistance,” Dr Salehuddin said, adding that it should be kept in mind that the country should not become reliant on others.
“There is a saying that if your hands are in somebody’s pocket, if he moves, then you have to move and we’re feeling that in every aspect,” he said.
“The donor agencies always try to suggest the government, but the government is trying to assert…We don’t want to become fully dependent on the development partners,” the adviser said.
Citing that many of the development projects are not being taken based on self needs or as per the requirements of the country, Dr Salehuddin said the government would try to undertake projects after proper scrutiny.
“We’ll definitely take those projects which would be beneficial for us. In addition, if there is any requirement for foreign funding, then we’ll explore that,” he added.
Noting that direct tax is very important, he said the stake of direct tax in Bangladesh’s revenue share is relatively less while the indirect tax like VAT is higher.
Mentioning that the basic principle of tax is equity and ability to pay, he said the tax burden should not be imposed only on some people and businesses.
Reminding the NBR officials that all concerned are staring at the faces of the NBR personnel, he said that no taxpayer should fear the revenue board staff while all should be rest assured of getting justice side by side there should be no leakage.
Noting that the tax officials discharge an import duty of the government, the adviser asked them to carry out their duties and responsibilities with more caution and sincerity.
He informed that a discussion would be held tomorrow with the US-delegation where the issues related to tax reforms, banking sector reforms, customs, tariff, avoidance of double taxation would get priority.
He said if the government does not improve the regulatory regime, then it would not be possible to attract much more FDI, FPI and portfolio investment.
“So, responsibilities upon you are high and please complete your tasks in a speedy manner… Don’t do postmortem, rather become proactive with a focus in future,” the adviser asked the tax officials.
Referring to his fellow colleague Dr Wahiduddin Mahmud’s comment on the NBR building as ‘impressive’, Dr Salehuddin said the nice outlook of the structure might become necessary in some cases to convince people.
“But please also uphold your inherent talents and wisdom…Please match your words and work with the nice outlook of the structure of the NBR building,” he said.
Citing that in direct taxation, the system in the USA is one of the best, the adviser said USA’s system is very strict and it is very hard to attain such the USA standard.
The International Monetary Fund (IMF) has urged Bangladesh to maintain a tight monetary policy to contain inflation, while stressing that monetary tightening alone will not be enough to restore economic stability.
Inflation in Bangladesh rose to 8 per cent in September, according to the IMF. The Washington-based lender has called for broader reforms in the financial sector, stronger revenue mobilisation and improvements in overall economic management to address the country’s persistent economic challenges.
Sonali Jain-Chandra, deputy director of the IMF’s Asia and Pacific Department, made the remarks in response to a question at a news conference on the economic outlook for Asia and the Pacific, held on the sidelines of the IMF and World Bank Group annual meetings in Bangkok, Thailand.
Asked whether tight monetary policy alone would be sufficient to tackle inflationary pressures that have persisted for more than three and a half years, Jain-Chandra said maintaining a restrictive monetary stance was important, but needed to be accompanied by other reforms.
Bangladesh is currently facing challenges in three key areas: revenue mobilisation, the financial sector and inflation, she said.
The IMF also expressed concern over the fragile state of Bangladesh’s financial sector, saying a credible reform strategy was needed to strengthen the sector’s capacity and ensure stability.
The fund also highlighted the country’s persistently weak revenue collection. Bangladesh’s tax-to-GDP ratio has declined over time and currently stands at around 7 per cent, placing it among the lowest in the world, according to the IMF.
The IMF stressed the need for a coordinated effort to increase revenue collection, saying higher government revenues were essential to finance development expenditure and strengthen the financial sector.
It called for necessary reforms to the revenue system and effective measures to improve the government’s capacity to generate income.
Talks Under Way on New IMF Programme
Meanwhile, discussions are continuing on a potential new lending programme for Bangladesh.
Jain-Chandra said Bangladeshi authorities approached the IMF in May for support under a new programme after deciding not to draw further instalments under the previous arrangement.
In response to the request, an IMF mission visited Dhaka in July to discuss various aspects of Bangladesh’s economic reform agenda.
According to Jain-Chandra, the reform issues discussed during the visit were closely aligned with the recommendations outlined in the IMF’s Article IV consultation for Bangladesh earlier this year.
The IMF has remained in regular contact with Bangladeshi authorities since the July visit, she said.
Jain-Chandra added that the fund remained closely engaged with the authorities and was ready to support Bangladesh in initiating the reforms needed to address its economic challenges.
The International Monetary Fund (IMF) has projected that Bangladesh’s gross domestic product (GDP) will grow by 3.2 per cent in the 2026-27 fiscal year, while average inflation could rise to 10.9 per cent, signalling mounting pressure on the country’s economy.
The projections were outlined in the IMF’s World Economic Outlook (WEO) report, released on Tuesday.
The latest growth forecast marks a significant downward revision from the 4.3 per cent projected by the IMF in April. The fund had subsequently forecast growth of 3.5 per cent in July before lowering its estimate further to 3.2 per cent.
The IMF has also sharply revised its inflation outlook for Bangladesh. In April, it projected average inflation of 6 per cent for the 2026-27 fiscal year. The latest estimate raises that figure to 10.9 per cent.
The combination of slower economic growth and persistently high inflation points to continued pressure on Bangladesh’s macroeconomic stability.
Bangladesh growth outlook trails other forecasts
The IMF’s latest growth projection for Bangladesh is lower than those of other major international development institutions.
The World Bank has forecast GDP growth of 3.4 per cent for Bangladesh in the 2026-27 fiscal year, while the Asian Development Bank (ADB) has projected growth of 4 per cent.
According to the IMF, Bangladesh’s economy grew by 3.6 per cent in the 2025-26 fiscal year, following growth of 3.5 per cent in the preceding fiscal year.
India, Bhutan expected to grow faster
The IMF has projected stronger economic growth in neighbouring countries, with India’s economy expected to expand by 7 per cent and Bhutan’s by 6.9 per cent in the relevant fiscal year.
The contrasting forecasts highlight the challenges facing Bangladesh as it seeks to restore economic momentum while tackling persistent inflation.
The IMF’s latest projections come as the annual meetings of the IMF and the World Bank Group are underway in Bangkok, Thailand.
Bangladesh’s economic situation, reform programmes and efforts to secure financing from development partners are among the key issues receiving attention during the meetings.
The World Bank supports the Bangladesh government’s policies to address the country’s current economic challenges, restore stability and implement medium- and long-term development plans, Finance Minister Amir Khasru Mahmud Chowdhury said on Tuesday.
He said the global lender was broadly aligned with Bangladesh’s economic programmes and policy priorities and would continue to support the country’s economic recovery and future development.
The finance minister made the remarks while speaking to journalists after a meeting with a World Bank managing director in Bangkok, Thailand, on October 13.
Amir Khasru said Bangladesh’s economy was facing significant challenges when the current government took office. Alongside dealing with the financial and economic burdens inherited from the previous period, the country was also having to navigate global economic disruptions caused by ongoing wars and geopolitical tensions.
He said the World Bank understood the realities facing Bangladesh and supported the government’s policy approach to overcoming the economic difficulties.
“The World Bank is aligned with the programmes and policy direction we have set to restore economic stability and ensure future development,” the minister said, adding that both sides would continue working together.
He said the World Bank was willing and prepared to provide the assistance Bangladesh needed.
No decision yet on proposed $10 billion in additional assistance
Clarifying reports that Bangladesh had sought an additional $10 billion in assistance from the World Bank, the finance minister said no final decision had been made.
He said discussions with the lender were ongoing and that possible proposals would be reviewed in light of those discussions. The process could take several months to complete, he added.
“No decision is being made at this stage. I have seen several inaccurate reports here and there. This is a discussion, and there will be follow-up based on these talks. It is a process that will continue over the next few months,” he said.
The minister stressed that the ongoing discussions should not be interpreted as a final agreement. Rather, they were intended to establish a basis for determining the next steps and considering possible decisions.
Further discussions would also take place in Dhaka, he said.
Expressing satisfaction with the progress of the talks, Amir Khasru said Bangladesh was in a favourable position to establish a framework for future cooperation.
He reiterated that the government’s economic policies, programmes and medium- and long-term development plans were broadly aligned with the World Bank’s position.
Government’s economic agenda aligned with BNP manifesto
The finance minister also said the World Bank’s position was consistent with the government’s economic plans and the Bangladesh Nationalist Party’s (BNP) election manifesto.
He said discussions were underway on how to address the country’s economic challenges and achieve the government’s development objectives.
According to the minister, the government has submitted a written proposal outlining a framework for partnership with the World Bank. Discussions on the proposed framework will continue.
He said the World Bank had provided various recommendations and suggestions, while Bangladesh had also presented its own proposals and recommendations.
Further discussions would be based on these submissions, he added.
Government optimistic about inflation and GDP targets
Asked about forecasts by the World Bank and the Asian Development Bank (ADB) on inflation and gross domestic product (GDP) growth, and how they compared with the government’s targets, the finance minister said the government did not intend to dispute the projections made by other institutions.
He said the institutions had prepared their forecasts based on their own calculations and analyses, adding that the country’s economic performance would become clearer as progress on key indicators was assessed over time.
“We do not want to dispute anyone’s projections. They have made their estimates based on their own calculations. We are carrying out our work, and they are doing theirs. What matters most is that the cooperation we need continues,” he said.
The minister expressed optimism that the government would be able to meet the inflation targets set out in the national budget.
He said the government was working to restore economic stability through continued engagement with the World Bank, implementation of its economic policies and progress on medium- and long-term development plans.
