The International Monetary Fund said on July 16 that its staff team had concluded a visit to Bangladesh, held at the request of the government, and that formal discussions on the contours of a replacement arrangement will take place in the months ahead. The IMF released the projection that Bangladesh's economic growth will moderate to 3.5% in fiscal 2027 and decline further to below 3% over the medium term, according to a statement issued at the end of the July 12-16 mission to Dhaka.
The South Asian nation is seeking a successor to the $5.5 billion bailout programme after the government of Prime Minister Tarique Rahman, which assumed office in February following elections, opted to exit the earlier arrangement on the grounds that some conditions did not align with national priorities. To date, Bangladesh has drawn about $3.8 billion from the programme that began in 2023 amid a severe foreign exchange crisis under the previous administration.
Economic pressures and near-term outlook
The IMF said Bangladesh continues to face meaningful fiscal, financial and inflationary pressures. It highlighted recent factors that have intensified these strains: the conflict in the Middle East, higher global commodity prices and supply disruptions. These developments have renewed inflationary pressures, elevated import and subsidy bills and worsened external sector strains. The lender also noted that stress in the banking sector remains elevated.
Against this backdrop, the IMF recommended policy measures aimed at stabilising the economy. It called for stronger revenue mobilisation and subsidy rationalisation to create fiscal space for priority social and development spending. The fund also advised the maintenance of tight monetary policy and prudent fiscal management to help reduce inflation and rebuild foreign exchange reserves.
Exchange rate and banking-sector guidance
The IMF said that consistent implementation of the crawling peg exchange-rate regime adopted in 2025 would bolster exchange-rate flexibility and support external stability. On the banking sector, the fund urged that any restructuring be anchored in a credible and comprehensive strategy, reflecting the elevated stress it currently observes.
Separately, the government is pursuing additional financing from multilateral lenders including the World Bank and the Asian Development Bank to help address persistent inflation, slowing growth, pressure on foreign exchange reserves and higher energy import costs linked to the Middle East conflict.
Next steps
IMF and Bangladeshi authorities have indicated they will negotiate a new programme framework in the coming months, with Finance Minister Amir Khosru Mahmud Chowdhury saying earlier that both sides had agreed on a broad framework which envisages phased reforms to reflect challenging economic conditions.
The IMF statement from the end of the mission did not specify dates for the forthcoming discussions or additional lending amounts under a new arrangement. It reiterated policy priorities to reduce inflationary pressures, shore up reserves and underpin long-term external stability.