Not just Pakistan! Bangladesh to get $1.3 billion from IMF; seeks $762 million augmentation in support

The International Monetary Fund (IMF) confirmed on Wednesday that Bangladesh requested the entity for a further monetary support of $762 million, because the nation grapples with mounting macroeconomic challenges.This request, if granted, would convey the overall IMF help to Bangladesh to roughly $4.1 billion beneath a mixture of credit score and sustainability programmes.“Amid vital macroeconomic challenges, the authorities requested an augmentation of SDR (Special Drawing Rights) 567.2 million (roughly $762 million) in IMF monetary support to Bangladesh beneath the ECF and EFF preparations,” stated Chris Papageorgiou, IMF mission chief for Bangladesh, quoted by PTI.The IMF plans to disburse $1.3 billion to Bangladesh in June after finishing its fourth evaluation of the $4.7 billion lending programme. IMF and Bangladeshi authorities reached a staff-level settlement to full the mixed third and fourth evaluations beneath the prolonged credit score facility (ECF), prolonged fund facility (EFF), and resilience and sustainability facility (RSF). The settlement nonetheless awaits approval from the IMF Executive Board, and is contingent on vital prior actions corresponding to full trade charge liberalisation and tax reforms.If accredited, the completion of the evaluations would unlock SDR 983.8 million (round $1.3 billion), comprising SDR 650.5 million ($874 million) from the ECF and EFF, and SDR 333.3 million ($448 million) from the RSF.Explaining the rationale behind the help, the IMF stated that the Bangladeshi economic system is beneath appreciable pressure, as its GDP development slowed to 3.3 per cent year-on-year in the primary half of the 2024-25 fiscal 12 months. While a modest rebound to 3.8 per cent is projected for the complete 12 months, pressures stay excessive due to exterior financing wants and home instability.Inflation, which approached double digits earlier in the fiscal 12 months, is now anticipated to fall to round 8.5% by the tip of the 12 months. However, the IMF warned that dangers stay tilted to the draw back, citing points throughout the banking sector and ongoing world uncertainty.To deal with the challenges, the IMF has urged tighter near-term coverage measures, alongside longer-term structural reforms. These embody strengthening governance, enhancing transparency, and enhancing the enterprise local weather to appeal to overseas funding and diversify exports past the ready-made garment sector.“Institutional reforms to bolster the independence and governance of Bangladesh Bank will be essential for ensuring long-term macroeconomic and financial stability and for the effective implementation of broader financial sector reforms,” IMF stated.