The IMF’s mission chief to Bangladesh, Chris Papageorgiou, stated that the IMF would collaborate with the upcoming government before finalizing the forthcoming loan review for Bangladesh. Speaking at a virtual press briefing, Papageorgiou emphasized the ongoing discussions with authorities, highlighting the significance of engaging with the new administration expected in February next year on IMF reform proposals. The plan is to sustain strong communication and engagement with Bangladeshi authorities across various sectors.
During the IMF mission’s visit to Dhaka from October 29 to November 13, led by Papageorgiou, discussions revolved around economic and financial policies under the 2025 Article IV consultation and the fifth review of the IMF’s Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF). Papageorgiou mentioned that the Article IV consultation serves as the IMF’s annual assessment of member countries’ economic well-being.
Papageorgiou affirmed that talks on the fifth review would progress in the upcoming months, with the Fund remaining dedicated to assisting Bangladesh in achieving sustained macroeconomic stability and robust growth benefiting all citizens. He noted that discussions on the fifth review commenced during the IMF’s annual meetings in Washington, emphasizing the importance of ambitious reform targets and the involvement of the newly elected authorities expected to take office in February.
The next mission is scheduled for late April or early May, with a potential combined review. Earlier, Finance Adviser Salehuddin Ahmed anticipated the next IMF loan installment around March or April next year, post the national election, ensuring no adverse impact on the economy.
Regarding the mission team’s interactions with political parties, Papageorgiou highlighted meetings with Jamaat-e-Islami and BNP to discuss potential reforms. He emphasized the necessity of these discussions to gather insights on economic plans and program views. Both parties expressed positivity towards the IMF program and collaboration with other international financial institutions, proposing a post-election roundtable with all stakeholders for priority discussions.
In its statement, the IMF noted a GDP growth slowdown in FY25 to 3.7 percent from 4.2 percent in FY24 due to production delays, policy adjustments, and increased uncertainty during popular unrest. While headline inflation decreased from earlier double digits, it remained at 8.2 percent in October. The IMF acknowledged progress in macroeconomic stability maintenance through fiscal and monetary policy tightening, resurgence of foreign exchange reserves post exchange rate reforms, but highlighted challenges concerning tax revenue and financial sector undercapitalization.
The Fund stressed the urgency of tax system simplification, financial sector vulnerability mitigation, and immediate banking reforms. It projected GDP growth to reach nearly 5 percent in FY26 and FY27, with a decline in inflation from 8.8 percent in FY26 to 5.5 percent in FY27. Papageorgiou advocated for bold tax reforms to boost revenue for social and infrastructure investments and emphasized prudent subsidy management, efficient tax administration, and enhanced financial management for fiscal space creation.
The IMF emphasized the need for robust banking reforms, a tightened monetary stance until inflation aligns with targets, full implementation of the new exchange rate regime, and structural reforms to unlock inclusive growth. It applauded governance enhancements in the central bank and fiscal sector, while calling for stronger anti-corruption measures and a more resilient anti-money laundering framework. Job creation, export diversification, and enhanced macroeconomic data were also highlighted, alongside the importance of climate resilience and mobilization of climate finance to achieve sustainable economic growth goals in Bangladesh.