The New Nation - Internet Edition

Staff Reporter

The visiting International Monetary Fund (IMF) mission chief Thomas Rumbaugh yesterday said recent improvements in export, increased remittance and bumper production of 'Boro' could push up the country's GDP growth to 6 percent in the next fiscal year from 5.5 percent.

"High inflation of food and oil remained around 10 percent and it could be a challenge for the government policy formulation, " he said at press briefing at the conference hall of the Bangladesh Bank (BB).

He called upon the government to increase the oil price through adjustment of the international market.

Jonathan C Dunn, Resident Representative, IMF, presented a survey reports on Asia and Pacific region's economy.

Mentioning the on going price hike of some essential commodities, the IMF chief said tackling the high prices of food and oil in the international markets is really a challenge.

He said robust private remittances coupled with foreign assistance including $ 218 million provided by IMF under Emergency Natural Disaster Assistance (ENDA) could help Bangladesh import of food from the international market.

He laid emphasis on 'food security' for the limited and marginal groups of people as 'bulwark' in current high price of it.

Lauding the efforts taken by the National Board of Revenue (NBR) for collecting tax and VAT ,Rumbaugh said the NBR has notably exceeded its target for collecting tax and VAT.

He was of the opinion that the further increase in revenue was possible through reducing exemptions, expanding the coverage of income tax and VAT and also increase in the number of taxpayers.

He was of the view that in the fundamental changes to tax legislation would be needed to establish a simple and transparent tax system.

The IMF mission chief said significant improvements in the primary market for the government securities and development of secondary market is necessary for a broader bond market that is needed to finance future growth.

He further said that the monetary authorities should remain vigilant in monitoring inflation.

"If economic activity and credit demand pick up, a monetary policy response may be required to keep inflationary pressures in check," he mentioned.

Responding to a query on the government's move to privatise the state owned commercial 'Rupali' bank with the Saudi prince that had finally proved abortive, the IMF mission chief termed it ' unfortunate' and hoped that the government would device new strategies to carry forward its privatisation process.

Prior to press briefing the 4-member IMF delegation met with the Bangladesh Bank Governor Dr Salehuddin Ahmed at the latter's office. The BB Governor informed the IMF team that the country's foreign exchange reserve remained stable and initiatives were underway for improving efficiency of the state owned commercial banks.