IMF Continues Talks with Bangladesh for Loan Deal

The International Monetary Fund (IMF) has said it will continue discussions with Bangladesh in pursuit of a staff-level agreement in the near future—possibly during the IMF-World Bank Spring Meetings this April in Washington.

In a statement issued today, the global lender said the agreement would facilitate the completion of the combined third and fourth reviews under its Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF) programmes.

“Discussions are continuing with the objective of reaching a staff-level agreement in the near term… We reaffirm our commitment to support Bangladesh and its people at this challenging period,” the IMF said.

An IMF mission, led by Chris Papageorgiou, visited Dhaka from April 6 to 17 to assess the country’s macroeconomic policies and outlook. The mission noted that Bangladesh's economy remains under considerable pressure amid persistent global uncertainty.

GDP growth slowed sharply to 3.3 percent year-on-year in the first half of FY2024–25, down from 5.1 percent in the same period of the previous year. The slowdown, the IMF noted, stemmed from the recent political unrest, tighter monetary and fiscal policies, and declining investor confidence.

Although inflation has eased from a decade-high of 11.7 percent in July 2024 to 9.4 percent in March 2025, it remains significantly above the Bangladesh Bank’s target range of 5 to 6 percent.

To stabilise the economy, the IMF recommended a package of reforms including fiscal consolidation, a more flexible exchange rate, improved tax compliance, and broader institutional and structural reforms. It also stressed the importance of enhancing governance, increasing transparency, building climate resilience, and diversifying exports to attract investment.

During its stay in Dhaka, the IMF mission held meetings with senior government officials, Bangladesh Bank, the National Board of Revenue, development partners, and private sector representatives.

The fourth tranche of the IMF’s $4.7 billion loan programme—originally scheduled for disbursement in March—was delayed due to Bangladesh's failure to meet some of the agreed prior actions.

So far, the country has received $2.3 billion from the IMF under the programme, which was approved in 2023. Each tranche of the loan is tied to conditions aimed at strengthening Bangladesh’s economic foundation, with the next instalment dependent on progress in tax collection and other reforms.

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