DHAKA, April 18 (Xinhua) — The International Monetary Fund (IMF) said on Thursday that Bangladesh’s economy continues to face persistent challenges and significant external financing needs.
The recent external shock and evolving developments are compounding the challenges and injecting significant uncertainty regarding the outlook, the IMF said in a statement.
Against this background, an IMF mission team led by Chris Papageorgiou visited Dhaka during April 6-17 to discuss economic and financial policies in the context of the combined third and fourth review of the IMF’s Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).
It said discussions focused on preserving macroeconomic stability and bolstering the country’s resilience to external shocks.
“The Bangladeshi economy continues to face multiple challenges amidst elevated global uncertainty. GDP (gross domestic product) growth fell to 3.3 percent (year-on-year) in the first half of FY25, down from 5.1 percent in the same period of FY24,” said Papageorgiou.
The challenges reflected economic disruptions caused by the popular uprising, a tighter policy mix, and heightened uncertainty that weighed on investment, Papageorgiou added.
After peaking at a decade-high of 11.7 percent in July 2024, the IMF said headline inflation eased to 9.4 percent year on year in March 2025, but remained well above Bangladesh Bank’s target range of 5-6 percent.
To address the mounting external financing gap and ensure a continued decline in inflation, near-term policy tightening remains essential, said the statement, noting that fiscal consolidation should prioritize the swift implementation of tax policy reform to remove extensive tax preferential treatments and simplify the tax system.
It said that carefully calibrating the monetary stance to avoid its premature softening will help anchor inflation expectations, while greater exchange rate flexibility will support price competitiveness, rebuild foreign exchange reserve buffers, and strengthen the economy’s resilience against external shocks.
Simultaneously, the statement said institutional reforms to enhance Bangladesh Bank’s independence and governance will be critical for maintaining long-term macroeconomic and financial stability and for the successful implementation of financial sector reforms, said the statement.■