While praising the government’s measures to curb inflation, the International Monetary Fund (IMF), on Wednesday, has encouraged further steps to attain the expected target.  
The Bangladesh government has taken measures to tighten the monetary policy to bring inflation down and inflation is coming down, but more actions are needed to ensure that inflation continues to come down to target durably – sooner than later, said IMF Asia and Pacific Department (APD) Director Krishna Srinivasan.
Krishna Srinivasan’s remarks came during a virtual press conference on the Regional Economic Outlook for Asia and the Pacific held in Tokyo as he was replying to a query on the latest monetary policy taken by the Bangladesh Bank.
“Like many other countries, Bangladesh too had to endure shocks, starting from COVID to the Russia-Ukraine war and subsequent shocks. In that context, Bangladesh sought access to a Fund supporter programme. And as part of that programme, there are many pillars, and one pillar, of course, is to bring down inflation. The other pillar is to make sure that you have fiscal sustainability while protecting the poor and the vulnerable,” elaborated the IMF official.
“You also had governance reforms, and you had reforms which were aimed at protecting the poor and the vulnerable through our conditionality,” he said.
Responding to another query on what else can the government do instead of issuing bonds worth billions to clear bank debt against arrears at an interest rate of 7.5%, which is further raising the government's debt, Krishna Srinivasan suggested maintaining robust revenue mobilisation and targeted expenditure.
“So fiscal consolidation in that context can have an offset, but the question is how much more consolidation can it do? And that’s where it’s important. … we have been talking about in the context of interest rates being high – countries have to go beyond what they’ve been doing in terms of fiscal consolidation and further tightening may be needed. Again, this is something which the country team working on Bangladesh will be assessing in the months forward to provide a more definitive answer,” he added.