Disagreements between the International Monetary Fund (IMF) and the Government of Bangladesh over two major reform conditions — revenue mobilisation and a fully market-based exchange rate — have delayed the release of the fourth and fifth tranches under the ongoing $4.7 billion loan programme.
At a press conference held on 17 April at Bangladesh Bank, the visiting IMF delegation confirmed that consensus on these issues had not been reached.
The fourth and fifth disbursements now hang in the balance, pending final review at the IMF Board meeting scheduled for late June.
The IMF mission, led by Chris Papageorgiou, Chief of the Development Macroeconomics Division in the Fund’s Research Department, arrived in Dhaka on 5 April to assess the country’s progress before releasing the next instalments of the loan.
Over nearly two weeks, the team held successive meetings with the National Board of Revenue (NBR), the Ministry of Finance, Bangladesh Bank and other key agencies. Papageorgiou read out the IMF's formal statement at the press briefing.
Originally, the fourth tranche was expected in February 2024, later postponed to March. Government officials had expressed hope that both the fourth and fifth tranches would be released together following the IMF mission’s visit in April.
However, the IMF team did not provide any definitive commitment. In response to journalists’ queries, Papageorgiou stated, “The IMF’s Spring Meetings begin on 21 April in Washington DC. There will be opportunities to discuss the remaining tranches there.”
He stressed the need for urgent revenue reform, saying, “Bangladesh’s tax-to-GDP ratio is alarmingly low — under 8% — whereas many developing countries maintain a rate between 10 to 12%. There is simply no alternative but to raise tax revenues.”
On foreign exchange, he noted, “Now is the time to allow a fully market-determined exchange rate. Reserves are in a satisfactory position, and remittance inflows are strong. The macroeconomic conditions are ripe for such a shift.” However, Bangladesh Bank has expressed reluctance, cautioning that a complete float may not be prudent at this stage.
Despite these sticking points, the IMF acknowledged Bangladesh's progress in fulfilling other conditions under the loan package. The government has undertaken reforms in revenue administration, enhanced exchange rate flexibility, bolstered foreign currency reserves, and initiated steps to improve governance in the banking sector.
The IMF also urged the removal of unnecessary tax exemptions and the broadening of the tax net to include all eligible citizens. Greater transparency in revenue collection processes was emphasised.
The delegation praised the initiative to separate the NBR’s tax policy and administration wings as a step towards modernisation.
Bangladesh's loan programme with the IMF began on 30 January 2023.
The country received the first tranche of $476.3 million on 2 February 2023, followed by $681 million in December and $1.15 billion in June 2024. In total, Bangladesh has so far received $2.31 billion, with $2.39 billion remaining to be disbursed.
Papageorgiou remarked that transparency, good governance, and an independent central bank are vital for creating an investment-friendly environment.
He called for comprehensive banking sector reforms and greater autonomy for Bangladesh Bank, highlighting their role in diversifying exports and enhancing macroeconomic resilience. He also underscored the need to invest in a climate-resilient economy.
According to the IMF’s assessment, Bangladesh's economy continues to face challenges amid global uncertainties.
GDP growth fell to 3.3% in the first half of FY2024–25, compared to 5.1% during the same period in the previous year. This slowdown has been attributed to domestic political unrest and declining investment confidence.
Inflation, which surged to an 11.7% ten-year high in July 2024, eased to 9.4% by March 2025. However, it remains well above Bangladesh Bank’s target range of 5–6%.
The IMF reiterated that higher revenue collection is imperative for expanding investment in infrastructure. To achieve this, a fair and efficient tax system must be established, they said.
