Uncertainty over the release of the next tranche of the International Monetary Fund (IMF) loan has raised concerns about Bangladesh’s economic outlook, although the government has said discussions with the global lender remain ongoing and constructive.
Officials familiar with the matter said the IMF has indicated it may not release the expected $1.3 billion instalment under the existing $5.5 billion loan programme by June, citing delays in key reforms in revenue collection, the banking sector, fuel subsidy adjustments and exchange rate management.
The development could put pressure on Bangladesh’s foreign exchange reserves and overall economic management at a time when the country is already grappling with rising fuel import costs and external financial challenges.
A member of the Bangladesh delegation attending the IMF-World Bank Spring Meetings in Washington, DC, led by Finance and Planning Minister Amir Khosru Mahmud Chowdhury, said the IMF had conveyed its concerns during recent meetings.
Under the current programme, Bangladesh is still due to receive $1.86 billion before its expiry in January next year. A tranche expected in December was earlier delayed, and Dhaka had hoped to receive both the December and June instalments together.
IMF officials have pointed to declining revenue collection, weak banking sector discipline, slow progress in reducing energy subsidies and delays in adopting a market-based exchange rate as key concerns. Krishna Srinivasan noted that Bangladesh’s tax-to-GDP ratio has fallen in recent years, complicating fiscal management.
Economists say the IMF may be considering a new loan programme with stricter conditions. Fahmida Khatun said the government now faces a choice between meeting IMF conditions or reassessing its engagement.
However, the government has pushed back against reports of any suspension. In a statement, the Bangladesh Embassy in Washington, DC said the IMF has reaffirmed its role as a development partner and expressed willingness to continue supporting Bangladesh.
During separate meetings with IMF officials, including Deputy Managing Director Nigel Clarke, both sides described the discussions as positive and constructive. They agreed on several reform areas, while noting that further dialogue is needed to reach consensus on outstanding issues.
The finance minister reiterated the government’s commitment to reforms while emphasising the need to protect public interest, expressing confidence that remaining differences can be resolved through continued negotiations.
