International Monetary Fund on Wednesday advocated for raising further the country’s energy price by cutting (energy) subsidy to create room to boost spending on social safety nets to protect the poor. The IMF also suggested the government to step up its tax collection programme in a bid to create more space to give priority to social and development spending.The recommendations came from the IMF deputy managing director Naoyuki Shinohara at a press briefing at the central bank headquarters in the capital. Shinohara arrived in Bangladesh on Tuesday for a two-day official visit.
He said, ‘Further bringing down the cost of inefficient and regressive energy subsidies will create scope to boost spending on well-targeted social safety nets to protect the poor.’
Shinohara expressed his satisfaction over the country’s macro-economic situation saying that the authorities had made substantial progress in macro-economic management using the IMF-supported external credit facility arrangement, approved in April 2012.
‘The country now has a stronger external and domestic position with regard to foreign exchange reserve which is now more than twice the low levels of late 2011, a prudential overall fiscal position, and lower underlying inflation’, he said.
The country’s banking sector has significantly strengthened as the government passed the bank companies act in July 2013 which enhanced the supervisory power of Bangladesh Bank, the IMF DMD said.
Asked whether IMF would keep any proposal to reach consensus among the political parties, he said that his organisation did not intervene in political issues of any country.
The political leaders will decide on how to establish a consensus among them, he said.
-With New Age input
