IMF wants cut in fuel subsidy and steps to control inflation

The International Monetary Fund (IMF) said targeted and time limited fiscal steps should come before general fuel subsidies or price controls. The fund fears that without this, inflation will run out of control and make everything costlier. The IMF shared this at a press conference on the Asia and Pacific Regional Economic Outlook. The Asia and Pacific Department held it in Hall LG 03 of the Queen Sirikit National Convention Center (QSNCC) in Bangkok, Thailand, the day before yesterday.

Mr. Krishna Srinivasan, Director of the Asia and Pacific Department, attended the press conference. Deputy Director Ms. Sonali Jain Chandra attended too, along with IMF communications officer Pavis Devasvadi. The speakers said three big matters shape the future of the Asia and Pacific region. These are the energy crisis from the conflict in the Middle East, the wave of AI driven technology, and the steady reshaping of trade.

The region as a whole has shown strength so far. But the effects are uneven across the region, and even within the same economy. Technology related sectors gain more than the other parts of the economy. The speakers also said the room for protection is not endless, and the days ahead may test this strength. Mr. Srinivasan said regional growth in the first half of 2026 did better than earlier forecasts, but it varies by economy.

He said the fund expects regional growth to fall from 5 percent in 2025 to 4.8 percent in 2026. That is higher than the 4.4 percent in the fund’s earlier forecast. The fund raised its growth forecasts a lot for economies that gain from the technology wave. These include Korea and several ASEAN countries, along with China, India and Japan. The fund cut its forecasts for countries that miss the technology gains and face high inflation.

Some conditions must be met to get IMF loan, says Finance Minister

Finance Minister Mr. Amir Khasru Mahmud Chowdhury said Bangladesh must meet some conditions to get IMF loan support. He said the talks with the IMF on a new programme have taken place. He said the loan will carry conditions, and the country must meet them. He also said some matters will be settled through talks. The minister said this after a meeting with IMF Deputy Managing Director Mr. Nigel Clarke.

The meeting took place on the fourth day of the annual meetings of the IMF and the World Bank Group, the day before yesterday. The minister said talks on the new programme move forward in a positive way. But the two sides must talk more about what conditions the programme will carry and how Bangladesh will meet them. He said both sides will settle some matters by understanding each other.

He said the IMF has views on many matters. These include the banking sector, the tax to GDP ratio, bank recapitalisation and macroeconomic stability. He said Bangladesh also agrees on these matters. He said the two sides have already solved many problems, and talks will go on for the rest. The minister also said the IMF is happy with Bangladesh’s recent economic progress.

He said the fund showed satisfaction with the progress after the budget. It also showed satisfaction despite global challenges, including the war in the Middle East. In talks on Bangladesh’s proposed new loan programme of 4.5 billion to 5 billion dollars, the IMF stresses higher revenue collection and reform of the financial sector.

Bangladesh’s revenue to GDP ratio among the lowest in the world

The IMF said Bangladesh’s revenue to GDP ratio has fallen to 7 percent. This is one of the lowest levels in the world. The IMF also said the country needs strategic steps to solve the big problems in its financial sector. Ms. Sonali Jain Chandra, Deputy Director of the IMF’s Asia and Pacific Department, said this. She answered journalists at the press conference on the economic situation of the Asia and Pacific region the day before yesterday.

She said it is urgent to bring back stability in the financial sector and to raise revenue to pay for development work. She said the country must also keep a tight monetary policy until high inflation comes under control. She said it must carry out the needed reforms on time. She said the ongoing talks on the new loan programme for Bangladesh review these matters. She said the IMF works with Bangladesh to move the reforms forward, and it also reviews the progress of these reforms.