Formal discussions between the International Monetary Fund (IMF) and Bangladesh on a new financial assistance programme are set to begin tomorrow, marking what is widely regarded as a significant step in shaping the country’s economic policy direction and external financing strategy for the coming years.
An IMF fact-finding mission, led by the Fund’s Bangladesh Mission Chief, Ivo Krznar, has arrived in Dhaka for a series of meetings with senior officials from Bangladesh Bank, the Ministry of Finance, and other ministries, divisions and government agencies responsible for economic management. The discussions are expected to assess the country’s macroeconomic conditions, review the progress of ongoing reforms, and evaluate Bangladesh’s readiness for a new IMF-supported lending arrangement.
The mission’s primary objective is to examine whether key economic reforms have advanced sufficiently to support negotiations on a fresh programme. According to officials familiar with the process, the talks will focus heavily on increasing domestic revenue mobilisation, strengthening governance in the banking sector, implementing structural financial sector reforms, and improving the efficiency of public expenditure management.
If the IMF is satisfied with the pace of reforms and the government’s policy commitments, a new lending programme could potentially be launched from January next year.
The Bangladesh government is seeking approximately US$4 billion to US$4.5 billion under a three-year programme. The proposed financing is intended to help maintain macroeconomic stability, ease pressure on external financing, strengthen foreign exchange reserves, and support the implementation of ongoing economic reforms. As part of this initiative, the Finance Minister formally requested a new IMF programme in a letter sent to the Fund on 9 June.
In its communication to the IMF, the government acknowledged that economic conditions have changed considerably since the previous programme was negotiated. Global economic uncertainty, shifting international market conditions, evolving political and economic realities, and mounting domestic financial pressures have made it difficult to implement some agreed reforms within their original timelines.
Despite those challenges, the government has reaffirmed its commitment to reform, emphasising that it intends to pursue a gradual and realistic implementation strategy that reflects Bangladesh’s current economic circumstances rather than abandoning the reform agenda altogether.
Officials from the Finance Division said the upcoming discussions will cover virtually every major macroeconomic indicator. Particular attention will be given to the recently announced national budget for the 2026–27 fiscal year, including the rationale behind various tax exemptions, challenges to achieving revenue collection targets, reforms to income tax and value-added tax (VAT), improvements in tax expenditure management, and the country’s longer-term revenue strategy.
The IMF delegation is also expected to seek detailed explanations on how Bangladesh intends to broaden the tax base after repeated shortfalls in revenue collection. Improving tax compliance and enhancing fiscal sustainability remain central priorities for the Fund in many of its country programmes.
The banking sector will be another major area of scrutiny. Discussions are expected to include strategies for reducing non-performing loans, restructuring financially weak banks, financing possible bank resolution measures where necessary, strengthening the operational independence of Bangladesh Bank, expanding risk-based banking supervision, and reinforcing overall governance across the financial system.
The IMF is likely to assess whether reforms already announced have translated into meaningful progress capable of improving financial stability and restoring investor confidence.
Beyond banking, the delegation will review broader fiscal risks, including the rising level of public debt, subsidy pressures in the power and energy sectors, electricity pricing policies, the financial performance of state-owned enterprises, and the effectiveness of social protection spending. Officials are also expected to discuss whether welfare initiatives, including the Family Card programme and other targeted assistance schemes, are reaching intended beneficiaries efficiently and delivering value for public resources.
Economic growth projections for the 2026–27 fiscal year will also feature prominently in the meetings. The IMF is expected to evaluate whether the government’s GDP growth target is realistic, how effectively the Annual Development Programme (ADP) is being implemented, and whether public investment is generating the expected economic returns. The pace and effectiveness of structural reforms required to sustain long-term growth are also likely to form an important part of the assessment.
Economists believe the visit represents far more than a routine consultation. A favourable assessment by the IMF could pave the way for formal negotiations on the new lending programme, including discussions on the final loan amount, phased disbursement schedule, and detailed policy commitments attached to the programme.
Conversely, if the IMF concludes that reform implementation has fallen short of expectations or that policy commitments remain insufficient, negotiations could take longer and may require Bangladesh to undertake additional reforms before financing is approved.
For that reason, the meetings scheduled over the coming days are expected to play a pivotal role not only in determining the prospects of a new IMF lending programme but also in influencing Bangladesh’s broader economic reform agenda, financial sector stability, and future access to international financial support.