Bangladesh will never be like Sri Lanka: IMF

The International Monetary Fund has said Bangladesh’s economic situation is fairly good compared to neighbouring Sri Lanka and the Fund believes that Bangladesh will never be like Sri Lanka.

“The IMF believes that Bangladesh will never be like Sri Lanka,” said Rahul Anand, head of the IMF delegation, at a press briefing in the city, on Wednesday.

He said Bangladesh has never failed in debt repayments. Anand’s observation followed the IMF delegation’s two weeks trip to Bangladesh as the Fund discussed Bangladesh’s credit appeal for $4.5 billion.

Bangladesh will receive loans from the IMF in seven instalments, with the first tranche worth $480 million arriving in February, the Finance Minister earlier told journalists.

Anand said, “We have had developed good relations with Bangladesh for a very long time.”

A 10-member staff mission delegation was present at the press conference held at the conference room of the Ministry of Finance.

“I will not compare countries like Sri-Lanka and Pakistan with Bangladesh,” he added.

Anand further said that if someone looks at the reserve coverage of this country compared to other countries, it has good reserve coverage.

While dwelling on the debt sustainability of countries, he said IMF’s analysis revealed under article IV during its March trip this year that Bangladesh’s debt is sustainable.

Now in the global scenario, the import bills are higher and currency depreciation is also carried out on a large scale but Bangladesh has less than forty percent of the total debt and also external debt is 20 percent of its GDP.

Even now the country’s economy is in a much tighter fiscal deficit. The fiscal deficit is always kept in check that leads to debt sustainability, he pointed out.

Bangladesh has a position of fiscal tightening. “It is very important to increase tax GDP ratio and domestic revenue mobilisation is the key element to furthering a good economy towards making the economy more resilient.”

Similarly, Bangladesh needs a good amount of FDIs for which economic reforms are required, the IMF mission chief added.

Next step after IMF staff level agreement

“This is the first and staff level agreement… we will go back to the IMF with $ 4.5 billion matter.  After receiving consent of the IMF management within two months, it will go to the Board of Governors for approval,” Anand said.