The International Monetary Fund (IMF) has reached an agreement to lend about $1.15 billion to Bangladesh, marking the third installment of financial assistance under its multi-billion-dollar loan programme aimed at supporting the country’s economic stability.
This funding is part of the IMF's Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).
The agreement, which is awaiting approval from the IMF's executive board, was finalised during a mission to Dhaka from 24 April to 8 May, led by IMF's Chris Papageorgiou.
Upon the board's approval, Bangladesh will have access to SDR871 million (about $1,152 million) in financing, the statement added.
Chris Papageorgiou commented on the agreement, saying, “The IMF team reached a staff-level agreement with the Bangladesh authorities on the policies needed to complete the second review under the ECF/EFF/RSF arrangements. Completion of the second review will make available significant financial support under the ECF/EFF and RSF."
He further added, "The authorities have made significant progress on structural reforms under the IMF-supported programme, including the implementation of a formula-based fuel price adjustment mechanism for petroleum products."
"Nonetheless, larger-than-expected spillovers from tightening of global financial conditions, and still elevated international commodity and food prices, coupled with domestic vulnerabilities, has led to persistently high inflation and declining foreign exchange (FX) reserves. This has exacerbated pressures on the economy and heightened the complexity of macroeconomic challenges," he added.
The IMF highlighted the need for continued economic reforms in Bangladesh, particularly in fiscal policy and revenue generation, to support social welfare and development.
The economic outlook suggests a moderation in growth to 5.4% this fiscal year, with a recovery expected next year as financial and external pressures ease.
