The government wants to implement reforms that are "realistic" and "compatible with the country's ground reality" in phases as Bangladesh braces for negotiating a newly planned credit programme with the International Monetary Fund (IMF).
Sources say the new government won't come out from reforms as a whole as agreed under the incomplete current lending package.
Finance Minister Amir Khosru Mahmud Chowdhury made the commitment last week at a meeting with IMF Deputy Managing Director Nigel Clarke in a virtual meeting where he sought a new credit programme as implementation of some reform measures under the ongoing recipe has been facing severe challenges, officials say.
In the three-year-long new credit programme, the government expects to get between $4.0 billion and $4.5 billion where Prime Minister Tarique Rahman's government wants to include some reforms that will be implemented on priority basis aligned with its election pledges.
Mr Chowdhury also preferred to take some effective and realistic reform measures instead of making commitment to implementing "highly ambitious" and tough reforms, according to officials concerned.
At the meeting, the finance minister was learnt to have said the present loan programme with the IMF was taken in a different economic and policy context. However, later, due to internal and external situations, political, economic and global context, challenges have been created in implementation of some of the reform measures.
A senior finance division official told The Financial Express the present programme with the IMF was negotiated by Sheikh Hasina's government back in 2022 in a different economic context.
"Concerned over getting funds to restore macroeconomic stability, the negotiators agreed with some harsh terms set by the IMF."
He says the present administration found that some of the pending prior conditions under the ongoing credit programme will put the popularity of the government under question.
Also, the official says, the newly elected government has its own political commitment and planning for implementation which may not have similarity with the policy and plans of Awami League government, so they are coming out from the existing credit programme.
Of the total $5.5 billion ongoing credit programme, until now, Bangladesh has received some $3.595 billion, before a stalemate crept in over sweeping reforms.
Officials say the existing programme is scheduled to end by this December and so the new government thinks implementation of some pending tough conditions within next seven months would not be possible for them. The IMF this past January, after conclusion of Article IV Consultation with Bangladesh, said: "Weak revenue mobilisation, banking-sector vulnerabilities, incomplete implementation of the new exchange-rate framework, and elevated inflation are weighing on macroeconomic stability and growth prospects."
The IMF board of directors also observed an uneven programme performance and emphasised that decisive and sustained policy actions and bold reforms are needed to restore macroeconomic and financial stability and support the country's long-term development goals.
"The performance criterion on government revenue collection was missed by a wide margin. The authorities have yet to adopt a high-level reform strategy for restoring banking -sector stability, as was agreed in the 3rd and 4th combined review," it said.
Also, the IMF said Bangladesh Bank needs to adjust its forex-intervention practices to meet conditionality on the exchange-rate arrangement. "While the primary deficit target was met, this was achieved through significant cuts in capital and social spending."
syful-islam@outlook.com