Commentry : IMF agreement cancellation: We praise Govt's bold move, but urgent alternative measures needed to recover economy
By Hemayet Hossain
The announcement to step back from the stringent conditional loan package of an international body like the International Monetary Fund (IMF) is undoubtedly a pivotal and unprecedented step for any emerging economy.
Recently, at the inauguration of 'World Investor Week 2026' organized at the Krishibid Institution Bangladesh (KIB) in Dhaka, Finance Minister Amir Khasru Mahmud Chowdhury officially declared the cancellation of the IMF loan agreement and affirmed that Bangladesh will no longer comply with the organization’s harsh conditions.
This courageous initiative to reduce over-reliance on multinational financial entities and assert sovereign economic decision-making deserves commendation and gratitude toward the government.
However, recent forecasts by various international organizations, including the World Bank, alongside current domestic economic indicators, clearly signal that Bangladesh’s economy remains fragile and vulnerable.
Amid ongoing pressure on foreign exchange reserves, persistent inflation, and a sluggish domestic market, abruptly walking away from the remaining portion of the $5.5 billion IMF loan program and its structured frameworks for tax and banking sector reforms could expose the nation to severe macroeconomic risks.
While IMF policies often impose immediate strain on citizens and emerging local industries through aggressive subsidy cuts and tax burdens—making such terms difficult to accept for a self-reliant economy simply terminating the contract will not resolve underlying challenges.
Instead, the government must urgently institute strategic and viable alternative measures to fill the resulting structural void.
Under these circumstances, maximizing domestic resource mobilization, reining in tax evasion, and modernizing the National Board of Revenue (NBR) are imperative.
Simultaneously, to address reserve deficits, policy support must focus on boosting remittance inflows and revitalizing non-traditional export sectors.
Rather than relying solely on global institutions, active steps should be taken to secure concessional loans and development assistance from friendly bilateral partners and regional development banks such as the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), and Islamic Development Bank (IsDB).
Moreover , restoring discipline to the financial sector demands rigorous administrative reforms to tackle long-standing non-performing loans (NPLs) and banking sector decay. Capital markets must also be stabilized to rebuild investor confidence and streamline bureaucratic procedures to attract Foreign Direct Investment (FDI).
The ambition to liberate the nation from foreign conditionality in pursuit of economic self-reliance is commendable. Yet, the ultimate success of this bold decision hinges on how swiftly and effectively the government builds a robust economic safety net. Proceeding without a clear blueprint risks plunging the economy into fresh crises.
So, formulating and executing an emergency economic roadmap through close coordination between the Finance Ministry and Bangladesh Bank must remain the utmost priority.
