New Delhi, April 19 Adviser to Bangladesh's Prime Minister warned that Bangladesh has become “hostage” to International Monetary Fund's (IMF) loan conditions, which could weaken the country's growth, a new report has said.
Rashed Al Mahmud Titumir, the advisor, warned that if textbook reform formulas are implemented ignoring local context, high inflation will follow, hurting farmers and low-income groups, a report from Bangladeshi media house New Age said.
Speaking at a seminar organised by the Economic Reporters’ Forum in Dhaka, Titumir cautioned that IMF targets such as raising the tax-to-GDP ratio under weak economic conditions could dip growth below 3 per cent and intensify stress on businesses as well as households.
The country accepted tough bailout terms earlier to sustain a patronage‑driven system without considering public interest, and is now compelled to continue with the IMF, Titumir was quoted as saying.
Titumir criticised “inconsistent positions of global institutions,” which acknowledge rising poverty but advise cuts in subsidies and direct support.
He said that the recently enacted Bank Resolution Act allowing former owners of distressed banks to apply for regaining ownership is still operational, adding that any contradiction of the provision with the constitution or existing laws could be addressed through the Supreme Court.
The law allows previous shareholders or eligible applicants to reclaim control of banks under resolution, overriding other provisions, which has already drawn criticism from economists.
He said the previous government has left behind a fragile economy, weak institutions leading to a stagnant investment landscape. Titumir added that remittance inflows sustained the economy in previous crises.
Addressing current challenges requires creative and context-specific solutions rather than rigid policy formulas, he said, calling for private sector investment, and better use of investible funds within the country.
He also stressed coordination between fiscal and monetary policies and reaffirmed the government’s support for an independent central bank, the report noted.
CPD distinguished fellow Mustafizur Rahman warned that Bangladesh could fall into a middle-income trap and a debt trap, as interest payments now exceed spending on education.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor