The visiting International Monetary Fund (IMF) delegation did not reach a staff-level agreement for the fourth and fifth tranches of the $4.7 billion loan agreement.
However, discussions are continuing with the objective of reaching an agreement in the near term, including during the April 2025 IMF-World Bank Spring Meetings in Washington, DC.
The mission said if the review meeting goes well, the fourth and fifth tranches may be disbursed in June. They also suggested that short-term policy tightening is essential to address Bangladesh's growing external financing deficit and control persistent high inflation.
The IMF delegation detailed multiple conditions and reform requirements for the loan program during a press briefing on Thursday.
The mission team led by Chris Papageorgiou visited Dhaka during April 6–17 to discuss economic and financial policies in the context of the combined third and fourth review of the IMF’s Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).
Papageorgiou said that negotiations are ongoing, with officials aiming to secure a staff-level agreement soon, potentially during the April 2025 IMF-World Bank Spring Meetings in Washington.
“This would facilitate the completion of the combined third and fourth program review. We reaffirm our commitment to support Bangladesh and its people at this challenging period,” he added.
During their visit, the team held meetings with Finance Advisor S Ahmed, Special Envoy to the Chief Adviser Lutfey Siddiqui, Bangladesh Bank Governor Dr Ahsan H Mansur Governor, Finance Secretary Md K Mozumder, Chairman of the National Board of Revenue (NBR) Md AR Khan, and other senior officials.
The team also met with representatives from the private sector, think tanks, foreign donors, and international development partners.
An IMF statement said the Bangladeshi economy continues to face multiple challenges amidst elevated global uncertainty. GDP growth fell to 3.3% (year-on-year) in the first half of FY25, down from 5.1% in the same period of FY24. The decline reflects disruptions from the popular uprising. A tighter policy mix, and heightened uncertainty also weighed on investment. After peaking at a decade-high of 11.7% in July 2024, headline inflation eased to 9.4% (y-o-y) in March 2025 but remains well above Bangladesh Bank's (BB's) target range of 5–6%.
“To address the mounting external financing gap and ensure a continued decline in inflation, near-term policy tightening remains essential. Fiscal consolidation requires swift tax reform to eliminate preferential treatments and simplify the system.
Properly calibrated monetary policy will anchor inflation expectations, while exchange rate flexibility will improve competitiveness, rebuild reserves, and strengthen economic resilience against external shocks," he continued.
Papageorgiou emphasized that a comprehensive strategy to boost revenue and reform expenditures is crucial for supporting increased social spending and infrastructure investment. Bangladesh’s persistently low tax-to-GDP ratio underscores the pressing need for tax reforms aimed at building a more equitable, transparent and streamlined system—one that ensures sustainable revenue growth, reduces widespread tax exemptions, improves compliance, and distinctly separates tax policy from administration.
He suggests that financial sector reforms must align with international standards, enabling orderly bank restructuring while protecting small depositors. Asset quality reviews and improved governance are vital for restoring confidence, while enhancing Bangladesh Bank's independence is crucial for stability.
He further added: “Sustaining the pace of structural reforms is crucial for tackling the country’s economic challenges. Improving governance and increasing transparency will play a vital role in creating a more favorable investment environment, boosting foreign direct investment (FDI), and expanding export sectors beyond ready-made garments.
Progress in AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) risk assessments and enhancements in data quality are equally important.”
He stated that climate resilience is essential for mitigating economic risks. The government should implement climate-responsive fiscal reforms and invest in sustainable infrastructure to safeguard financial stability.
