Staff Reporter:
The IMF said on Thursday it will continue discussions with the Bangladesh government to sign a staff-level agreement over unlocking the third and fourth tranches of a $4.7 billion bailout package.
“If everything goes according to plan” the loan disbursements should happen by the end of the fiscal year ending June, Jayendu De, IMF’s resident representative in Dhaka, told reporters at a briefing, reports Bloomberg.
This means that despite acknowledging mounting challenges for Bangladesh economy, the IMF is still hoping the country to swiftly overcome some of these.
In a statement published on its website, the Washington-based lender said the inflation has fallen recently from a decade-high of 11.7% in July last year. However, last month, it still stayed above the central bank’s target range of 5–6%.
The IMF statement suggested Bangladesh has to take swift and arduous efforts to improve from the current economic troubles, and secure the earmarked tranches.
It has to swiftly overhaul the tax regime by dropping widespread exemptions and expanding tax net, further liberalise the foreign currency exchange rate, and ensure swift banking sector reforms.
“At present, the Bangladeshi economy continues to face multiple challenges amidst elevated global uncertainty. GDP growth fell to 3.3 percent (year-on-year, y-o-y) in the first half of FY25, down from 5.1 percent in the same period of FY24, reflecting economic disruptions caused by the popular uprising, a tighter policy mix, and heightened uncertainty that weighed on investment.”
The latest delay adds to the funding challenges faced by the South Asian nation. A $645 million loan tranche that was approved in December last year was withheld by the IMF due to unmet conditions, including non-compliance of tax targets and reforms set by the lender.
