The delegation of the International Monetary Fund (IMF) has recommended adjusting (increasing) the prices of fertilizers, electricity and gas to keep the balance of the budget for the next fiscal year 2024-25 and keeping subsidies at a tolerable level.
The IMF delegation to monitor the implementation of conditions under the loan program made the recommendation on Thursday (25 April) in a meeting with the Finance Department's budget division.
The delegation also sought to know what action was being taken against willful defaulters. Besides, targeted reduction of NPLs, especially of government-owned banks, and urgent implementation of pending laws related to banks and financial institutions.
Sources in the finance ministry said the government welcomed the government's adoption of a periodic formula-based price adjustment mechanism for petroleum products that would have reduced subsidies, as part of the mission meeting with the budget division of the finance division on subsidies.
However, to improve the overall budget management, it has recommended to increase the prices of electricity, gas and fertilizers to reduce subsidies in other sectors. In this context, the officials of the finance division said that the government will give adequate subsidy to agriculture for the time being keeping in mind the issue of food security. However, to reduce the subsidy on electricity and gas, the prices of these will be increased gradually.
The delegation, led by Chris Papageorgiou, head of the IMF's Development Microeconomics Division, presented these observations in a meeting with the Financial Institutions Division of the Ministry of Finance.
Financial Institutions Division Secretary Sheikh Mohammad Salimullah led the meeting on behalf of the government. At this time, the MD of Sonali Bank Afzal Karim along with the officers of the financial institutions division also with MDs of Janata, Agrani and Rupali Bank were also present.