Finance Minister AHM Mustafa Kamal has said the government took a loan from the International Monetary Fund (IMF) as it was fearful of the probable consequences of the Russia-Ukraine war.
"We couldn't understand how long the war would last. Initially, when the foreign currency reserves were depleting, we became scared. We had fears from the day the war started, which is why we borrowed from the IMF," he said.
While speaking to the media following a meeting with Yamada Junichi, executive senior vice president of the Japan International Cooperation Agency (Jica), at the Secretariat on Thursday, Minister Kamal also said that repaying the loan provided by the IMF is not difficult.
The IMF loan is significant, but the amount borrowed is equivalent to two months' worth of remittances, he explained.
In response to another question, Kamal said that when the current government came into power, the inflation rate was 12.30% and it has not increased since then.
"It should not be evaluated solely based on monetary figures; social security should also be considered. This year, an allocation of Tk1,26,000 crore has been made for social security in the budget. In addition, income tax and VAT exemptions are being provided."
The inflation rate is in line with what has been targeted in the budget, added the finance minister.
Kamal further stated that people are suffering worldwide, and Bangladesh is not outside the realm. "Amid this situation, the government has stood by the side of the people with whatever facilities it has in its hands. Overall, Bangladesh is doing well."
Replying to a question as to how long the government's austerity measures will continue, the finance minister said, "America turned towards austerity when a bank failed there. This year, three more banks of theirs have failed. If we consider Western economics, what Bangladesh has achieved in this crisis period is much better compared to others."
The finance minister also highlighted the progress of various macroeconomic indicators.
He stated that the GDP growth rate has remained quite similar over the past three years. The overall size of the GDP has increased. There has been an increase in per capita income. The rates of poverty and extreme poverty have decreased. Investment remains stable as a proportion of GDP. Even the tax-GDP ratio shows significant progress. Remittance income has increased.