Bangladesh is set to begin formal discussions with the International Monetary Fund (IMF) over a proposed new lending programme, marking a significant step in the country’s efforts to strengthen macroeconomic stability and accelerate long-term economic reforms.
An IMF fact-finding mission, led by Bangladesh Mission Chief Ivo Krznar, is scheduled to begin meetings from tomorrow with officials from Bangladesh Bank, the Ministry of Finance and several other government ministries, departments and agencies.
The primary objective of the visit is to assess the government’s progress in implementing economic reforms and to review the latest developments across key sectors of the economy. The findings from the mission are expected to shape the next stage of negotiations on a new financial support package.
According to officials familiar with the process, the IMF is considering launching a new lending programme for Bangladesh from next January, with particular emphasis on increasing tax revenue, strengthening fiscal management and reforming the country’s banking sector.
The government hopes to secure between US$4 billion and US$4.5 billion under a three-year arrangement. The proposed financing is intended to help preserve macroeconomic stability, ease pressure on external financing, support foreign exchange reserves and provide resources for implementing structural reforms. Finance Minister submitted a formal letter to the IMF on 9 June requesting consideration of the new programme.
In that communication, the government acknowledged that the economic and policy environment has changed substantially since the previous IMF programme was agreed. Shifts in the political economy, prolonged global uncertainty and emerging domestic economic challenges have slowed the implementation of several reform commitments. Nevertheless, the government reaffirmed that it remains committed to the reform agenda and intends to implement the measures gradually in line with Bangladesh’s evolving economic realities.
Officials at the Finance Division said discussions during the current mission will cover almost every major macroeconomic indicator. Particular attention will be given to the recently announced 2026–27 national budget, including the rationale behind various tax exemptions, the government’s repeated shortfalls in revenue collection and the progress of reforms to income tax and value-added tax (VAT).
The IMF delegation is also expected to examine tax expenditure reforms, fiscal consolidation measures and broader strategies to strengthen the country’s financial system. Revenue mobilisation has remained one of the IMF’s principal concerns, as Bangladesh continues to face rising expenditure pressures while seeking to finance ambitious development programmes.
Banking sector reforms will feature prominently in the discussions. The mission is expected to review measures aimed at improving governance within banks, reducing non-performing loans, restructuring weak financial institutions and arranging financing for bank resolution programmes. The delegation will also assess progress towards enhancing the operational independence of Bangladesh Bank and strengthening risk-based banking supervision.
The agenda extends well beyond the financial sector. Officials said the IMF will seek explanations for weaker-than-expected revenue collection and the rise in public debt. Discussions are also expected to cover growing subsidies in the electricity and energy sectors, electricity tariff adjustments, the financial health of state-owned enterprises and government expenditure on social protection schemes, including the Family Card programme.
The Fund is also likely to examine whether the government’s GDP growth target for the 2026–27 fiscal year is realistic in the current economic environment. The effectiveness of social safety net programmes and the efficiency of spending under the Annual Development Programme (ADP) will also come under scrutiny as part of the overall assessment of public financial management.
Economists view the visit as far more than a routine consultation. They believe it represents an important starting point in determining the future direction of Bangladesh’s economic policy and its engagement with international financial institutions.
A favourable assessment by the IMF mission would pave the way for full-scale negotiations on the proposed lending programme. Those negotiations would determine the final loan size, the timetable for disbursements and the specific reform commitments attached to the arrangement.
Should the IMF conclude that reform progress has fallen short of expectations, however, negotiations could take longer and the conditions attached to any new lending programme may become more stringent. The outcome of the current discussions is therefore expected to play a crucial role in shaping Bangladesh’s economic policy and external financing strategy over the coming years.
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