Bangladesh, WB, IMF reach policy consensus on reforms, govt focuses on investment

Prime Minister’s on Finance and Planning Adviser Rashed Al Mahmud Titumir on Monday said Bangladesh has reached broad policy alignment with the World Bank (WB) and the International Monetary Fund (IMF) on key economic reforms aimed at restoring stability, strengthening discipline in the banking sector, increasing tax revenue and creating employment.

"The government is pursuing a comprehensive economic recovery and reconstruction strategy, with greater domestic and foreign investment, reopening closed factories, expanding social protection and addressing rising energy costs among its major priorities," he said.

The adviser made the remarks while speaking to journalists ahead of the 2026 Annual Meetings of the IMF and the World Bank Group in Thailand, said a press release.

Titumir said the government had a politically mandated roadmap to recover, restore and rapidly rebuild the economy to put the country on a path to prosperity.

The plan has been outlined in a five-year economic strategy, with several fundamental priorities aligning with the reform proposals of the World Bank and the IMF, he added.

"The people want discipline in the financial sector, higher tax collection relative to GDP, increased spending on social protection and employment generation through industrialisation," he said, adding that reopening closed factories was also a public expectation.

The adviser said alignment between the government's reform priorities and those of multilateral development partners would facilitate implementation and improve the prospects for sustainable reforms.

However, he emphasised that the political government would retain ownership of the reform agenda and responsibility for its implementation.

Titumir said the government had discussed with the World Bank the additional financial pressure on the energy sector arising from the conflict in the Middle East, which began on 28 February, and its impact on ordinary people.

He said the government had refrained from fully adjusting domestic energy prices to international market levels to limit the burden on consumers.

Referring to the World Bank's recent report, he said poverty had increased during the previous government's tenure.

The present government is planning to support poor households through programmes such as the Family Card, he added.

According to assessments by independent research institutions, such initiatives could potentially reduce the poverty rate by around five percentage points over five years, he said.

The government has also highlighted the need for financing to strengthen climate resilience, expand renewable energy and develop essential infrastructure.

Titumir identified restoring discipline in the financial sector as one of the major challenges to economic recovery.

He said ordinary citizens were now bearing the consequences of irregularities and lending-related disorder in the banking sector during the previous administration.

Restoring confidence in banks and rehabilitating the weakened financial system would require refinancing support, he said, adding that discussions were underway with the International Finance Corporation (IFC) and other institutions on the issue.

Without stability in the banking sector, it would be difficult to achieve the targets for higher investment and employment, he continued.

The adviser also stressed the need to raise the tax-to-GDP ratio, saying excessive tax exemptions and irregularities in tax administration had weakened revenue collection in the past.

Lower revenue mobilisation had widened the fiscal deficit and constrained public spending on social protection and development, he said.

He called for coordinated action to strengthen financial discipline, increase revenue, expand social safety nets and create jobs.

The government is taking initiatives to arrange special financing to reopen closed factories and encourage fresh investment, Titumir said.

He noted that the number of educated and young unemployed people was growing while many factories remained shut, requiring coordinated efforts to boost production, develop new entrepreneurs and generate employment.

Migrant workers, entrepreneurs in the ready-made garment sector and women's participation in formal employment had played important roles in Bangladesh's economic progress, he said.

The country would need to build on these contributions by expanding production and employment opportunities alongside social protection programmes, he added.

Titumir also expressed optimism about expanding trade and investment ties between Bangladesh and Thailand.

He said several promising sectors for Thai investment in Bangladesh had been highlighted during a meeting with the Thai Chamber of Commerce, particularly those offering opportunities for production, processing and value addition.

Thai investors had shown interest in agro-processing, fruits, dairy products and halal food processing, he said.

Bangladesh produces substantial quantities of seasonal fruits, including mangoes, jackfruits and lychees, but inadequate cold-storage and processing facilities result in significant post-harvest losses, often depriving farmers of fair prices.

Investment in processing these products could help reduce waste, increase farmers' earnings and create export opportunities for processed foods, including halal products, he said.

Titumir said Bangladesh's objective was not merely to reduce the bilateral trade deficit but also to expand overall trade by establishing stronger links between the two countries' production and supply chains.

He said there was scope to develop integrated production networks under which raw materials could be produced in Bangladesh, intermediate goods manufactured in Thailand and finished products assembled for export, with the reverse arrangement also possible for other products.

Discussions had also covered improving maritime connectivity between Chattogram Port in Bangladesh and Ranong Port in Thailand, he said.

More efficient shipping links between the two ports could facilitate cargo movement and open up new opportunities for regional trade, he added.

The adviser stressed the importance of exploring free trade agreements with members of the Association of Southeast Asian Nations (ASEAN) and opportunities under the Regional Comprehensive Economic Partnership (RCEP) framework.

Greater access to regional tariff preferences could help Bangladesh expand exports beyond the bilateral market, he said.

Thailand had also expressed interest in expanding cooperation in agriculture and agro-processing, maritime connectivity and the utilisation of fisheries resources in the Bay of Bengal, Titumir said.

Such cooperation could help boost production, exports and employment in both countries, he added.

About multiple sources of financing, Titumir said the government was mobilising financing from multiple sources to implement its electoral commitments, with domestic and foreign investment expected to account for a substantial share.

He said investment from China had begun, while the government had engaged with Japanese companies, including Toyota and Marubeni Corporation.

A US delegation had also visited Bangladesh, while the government was in contact with Silicon Valley-based investment and innovation platform Plug and Play and major technology companies, he added.

According to the adviser, expectations of political stability and policy continuity were helping generate investor interest in Bangladesh.

The government aims to combine financing from international development partners, foreign investment and domestic resource mobilisation to advance economic recovery and reconstruction, he said.

He also noted that Bangladesh was expanding cooperation with the World Bank, the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB) and the Islamic Development Bank (IsDB).

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Titumir said the ADB had already announced assistance worth USD$5 billion.

He stressed that financial-sector discipline, stronger revenue mobilisation, wider social protection, industrialisation and employment generation would need to advance together to establish the economy on a sustainable footing.

The government intends to work in coordination with international development partners and investors to achieve these objectives, he added.