Bangladesh and the International Monetary Fund have reached agreement on the overarching structure for a new IMF lending arrangement, with the partners aligning on a phased approach to reforms designed to account for the nation's strained economic position, Finance Minister Amir Khosru Mahmud Chowdhury said.
Chowdhury briefed reporters after meeting an IMF fact-finding mission, saying the two sides had clarified the basis for a fresh programme intended to replace the current $5.5 billion bailout. The newly elected government had chosen to leave the previous arrangement, arguing that some of its conditions did not match the administration's priorities.
"The basis for the new programme has been clarified, and the IMF has fully agreed with the proposed framework," Chowdhury told reporters.
He said the government and the IMF concurred that reforms should be introduced in phases and that the sequencing proposed by Dhaka was acceptable to the Fund. The minister emphasized that the IMF recognised the importance of protecting public welfare while implementing those steps.
According to Chowdhury, the visiting IMF delegation noted progress the new government has made on a number of fronts during its first four months in office, naming financial sector reforms, revenue collection and capital market development. Discussions also touched on measures aimed at raising Bangladesh's tax-to-GDP ratio.
Chowdhury described the meeting as primarily focused on setting the foundation for the new programme, and he noted that more detailed bargaining over specific policy conditions such as subsidies had not yet started.
Bangladesh originally entered the IMF bailout in 2023, under the previous prime minister, at a time of severe foreign exchange strain. Roughly $3.8 billion of that programme has been disbursed to date.
The government led by Prime Minister Tarique Rahman, which took office in February following elections, has sought a new IMF arrangement as persistent inflation, slowing economic growth and pressure on foreign exchange reserves continue to weigh on the economy.
Chowdhury said negotiations would proceed, with a subsequent round expected to coincide with the IMF and World Bank annual meetings scheduled for September or October. Until those discussions are completed, the framework provides a broad roadmap while leaving specific policy conditions to be negotiated.
Context limitations - The meeting established a framework and sequencing for reforms but did not finalise detailed policy commitments or subsidy arrangements. Further technical negotiations are required before a formal programme is completed.