The International Monetary Fund (IMF) has reached a staff-level agreement with Bangladesh, paving the way for the disbursement of approximately US$1.3 billion under ongoing economic reform programs. With this installment, Bangladesh’s total IMF support will rise to US$5.4 billion, including US$4.1 billion under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF), and US$1.3 billion under the Resilience and Sustainability Facility (RSF).

The agreement, however, is contingent on the implementation of several prior actions—chiefly revenue mobilization reforms and a flexible exchange rate regime. It is also subject to approval by the IMF’s Executive Board.

According to the IMF, Bangladesh continues to face macroeconomic pressures, with real GDP growth slowing to 3.3% in the first half of FY2025 due to political unrest. Growth is expected to recover slightly to 3.8% by year-end. Inflation, though gradually easing, is projected to remain high at around 8.5%.

To address these challenges, the government has pledged to:

• Implement fiscal reforms by cutting tax exemptions and controlling non-essential expenditures,
• Tighten monetary policy to curb inflation,
• Improve exchange rate flexibility and boost foreign reserves.

The IMF has also called for swift reforms in the banking sector, including bank restructuring, better risk-based supervision, and enhancing the independence of Bangladesh Bank.

Additionally, improving governance, attracting foreign investment, and advancing climate resilience through the RSF remain key priorities.

The IMF praised Bangladesh’s continued reform commitment and constructive engagement during discussions in Dhaka and Washington, emphasizing that these steps are vital for long-term economic stability and resilience.