The World Bank (WB) and the Asian Development Bank (ADB) urged the government on Thursday to implement necessary reforms and improve the investment climate to effectively navigate the current economic challenges.
At the same time, they reiterated their full cooperation in supporting these efforts.
These calls came as the local heads of the multilateral agencies met with Finance Minister Abul Hassan Mahmood Ali at his office at the Bangladesh Secretariat.
He also recommended effective measures to address inflation, which has surpassed 9.0 per cent in recent months.
After the meeting, the finance minister briefed reporters on their discussion of broader economic issues with the World Bank representative.
He said the bank's country director has assured of extending cooperation, especially for implementing economic reforms across various sectors.
"We need assistance and they are ready to help us," the minister said, without further details.
While talking to reporters, Mr Seck mentioned the World Bank's long-standing and substantial support for Bangladesh and expressed the desire to elevate it to a new level.
Alongside lending, he stressed the critical importance of financing reforms in Bangladesh.
"We discussed how the economic reform agenda is very urgent to move on several fronts, whether it is on exchange rate policy, fiscal policy, safety net policy to protect the most vulnerable from shocks. It is also about banking sector reforms, and it's a huge agenda," said Mr Seck.
He said the World Bank Group is ready to support Bangladesh in carrying out these reforms.
Responding to a query, Mr Seck noted the World Bank's investment of over $52 billion in Bangladesh since independence. Currently, the bank has over $16 billion in commitments across diverse sectors like health, education and energy.
During his meeting with the finance minister, ADB Country Director Edimon Ginting said the government has been dealing with the foreign currency reserve shortage successfully.
"We feel the implemented policies are on the right track, but some fine-tuning and acceleration are needed to strengthen the reserve."
At the same time, he said, the ADB brings foreign currency to Bangladesh with its operations, similar to other multilateral and bilateral development partners.
"Expanding ADB's operations together with development partners can further boost forex reserves," he noted.
Mr Ginting said the ADB usually provides budget support every year. The $800 million budget support provided by the ADB last year was directly injected into the reserves.
He also mentioned the vital role of the private sector and expatriates in replenishing reserves, saying, "If they send back more foreign currency, it will significantly boost the reserve."
Mr Ginting said, "As the election is over, confidence will come back, strengthening the economy."
He added, "The ADB is proud of Bangladesh's 15-year progress and we are committed to helping regain the past high growth. Despite current challenges, we are confident that the next five years will be better for Bangladesh."
Mr Ginting said Bangladesh is one of the "great development stories" certainly the ADB is "proud of working with".
He underscored the need for continued improvement in the investment climate, saying, "...over time, the government needs to improve the investment climate."
Acknowledging Bangladesh's growth success, he commented, "In terms of attracting foreign direct investment (FDI), Bangladesh is below its weight."
He suggested improvements in the investment regulatory framework as a potential solution.
On the question of whether the country's economy was on the right path, the ADB country director said the economy of Bangladesh is very strong even with the current challenges.
The growth is 6.0 per cent, for which all should be proud of.
"… Bangladesh's economy has been very strong and will continue to be strong while there is confidence in the private sector. We'll continue to support the government," he added.
After the meeting with the ADB country director, the finance minister told newsmen that the government has started working on improving the foreign currency reserve situation.
"We've overcome previous challenges, and we're confident in doing so again," he said.
syful-islam@outlook.com