IMF Review of Bangladesh’s Economic Progress
Finance Adviser Dr. Salehuddin Ahmed recently stated that the International Monetary Fund (IMF) is continuing its review of Bangladesh’s progress under the ongoing loan programme. He mentioned that a final decision regarding the next installment of the loan is expected only after the formation of the next political government. The adviser highlighted that the IMF has acknowledged the efforts made by the government to address macroeconomic challenges and implement necessary reforms, particularly in revenue generation.
He noted that while tax revenue remains low, there are structural reasons for this. “We agree that tax revenue remains low, and there are structural reasons for this,” he said. The adviser also emphasized that the government has already undertaken necessary reforms and is consolidating the progress before the upcoming general election, scheduled for February 2026.
Addressing Tax Compliance and Revenue Collection
Dr. Ahmed pointed out that tax compliance among citizens remains weak. Additionally, the temporary suspension of the new National Board of Revenue (NBR) for two months had an impact on revenue collection. “We are working to resolve these issues,” he added. The adviser also mentioned that the IMF has emphasized increasing expenditure in social sectors such as health, education, and social protection. On food security, he said the country is performing reasonably well.
The adviser also discussed the importance of maintaining stability during the interim administration and handing over a well-structured economic reform framework to the elected government. “We will consolidate the work done so far. Of course, we cannot complete everything. Major reforms such as tax restructuring, public sector pay commission review, and strengthening the banking sector will continue. These will be carried forward by the next government,” he said.
IMF Review and Future Disbursement
According to the adviser, Bangladesh has already submitted relevant reports to the IMF, and a review mission will visit the country again early next year. “The IMF will review again around the election period and then decide on disbursement. We have no objection to this. A stable political government is needed for sustained reform,” he explained.
Dr. Ahmed also mentioned that the $4.7 billion IMF loan programme, approved in January 2023, aims to support Bangladesh’s economic stability, strengthen fiscal reforms, and enhance resilience amid global economic pressures. Several tranches have already been disbursed, while further installments remain tied to policy performance benchmarks and structural reforms.
Banking Sector Challenges and Reform Efforts
The adviser identified the banking sector as the most critical challenge in the economy. “Some reforms have already begun, and the rest will proceed gradually. These issues will also be handed over to the next government,” he said. An independent committee comprising economists has been formed to recommend reforms in the tax system.
In response to whether the sixth installment of the IMF loan will be released during the interim government’s tenure, Dr. Salehuddin said the IMF will review progress again after the national election expected in February. “They want to see how much the political government continues the reforms. That is important for them. So, after their review early next year, they will make a decision,” he said.
Recent Developments and Financial Reserves
The IMF will delay disbursing the sixth tranche until the next national election and the new elected government assumes office. The interim government that assumed power on August 8, 2024, has announced that the next general election would be held in February.
Finance ministry officials said they were expecting the releases of the sixth and the seventh tranches in June 2026. In June 2025, the IMF also increased the overall loan amount to $5.5 billion from $4.7 billion under the loan programme that began in 2023.
Economic Growth and Foreign Exchange Reserves
The programme period has also been extended by six months to January 27, 2027, from July 2026, following requests from Dhaka. The interim government has already reduced the balance of payment pressure. Driven by higher remittance and export earnings, the country’s gross foreign exchange reserves increased to $32 billion on October 16, the highest in 31 months.
The latest IMF mission is also linked to the Article IV report, an annual consultation with its member countries on the overall economy, on Bangladesh. The adviser concluded by stating that the IMF is very happy with the overall economic direction and has acknowledged the efforts made by the government.