- An IMF staff team visited Dhaka following a request from the government for a new Fund-supported economic reform program. The visit provided an opportunity to take stock of recent developments and discuss the authorities' reform priorities.
- Bangladesh continues to face significant fiscal, financial sector, and inflation challenges. These pressures have been compounded by the war in the Middle East, which has increased import and subsidy costs and renewed inflationary pressures, amid elevated banking sector stress.
- Economic growth is projected to moderate to 3.5 percent in FY2027 and remain below 3 percent over the medium term amid continued fiscal and financial sector pressures. Advancing reforms to strengthen revenue mobilization and address weaknesses in the banking sector would help improve the medium-term outlook.
Dhaka, Bangladesh: An International Monetary Fund (IMF) staff team led by Mr. Ivo Krznar visited Dhaka from July 12 to 16, 2026, following the government's request for a new Fund‑supported program. The purpose of the visit was to take stock of economic and financial developments and discuss the authorities' reform priorities.
At the end of the mission, Mr. Krznar issued the following statement:
"The IMF team held constructive discussions with the Bangladeshi authorities on recent economic developments and their policy priorities. The fact-finding visit provided an opportunity to better understand the authorities' policy plans, economic reform priorities, and capacity development needs. Discussions on the possible parameters of a new arrangement-including its size and associated reform commitments-will take place in coming months.
"Bangladesh continues to face significant fiscal, financial, and inflationary challenges, which have been compounded by the war in the Middle East. Higher global commodity prices and supply disruptions have renewed inflationary pressures and increased subsidy costs, further constraining already limited fiscal space. Higher import costs have also placed pressure on the external accounts, notwithstanding continued strong remittance growth. Banking-sector stress remains elevated.
"Staff's discussions during the visit were guided by the policy priorities identified in the 2025 Article IV consultation. Stronger revenue mobilization and subsidy rationalization are needed to create fiscal space to increase priority social and development spending. Well-targeted social support can help mitigate the impact of revenue reforms on vulnerable households. Tight monetary and prudent fiscal policies should be maintained to reduce inflation and rebuild foreign exchange reserves. Consistent implementation of the crawling peg regime adopted in 2025 would help enhance exchange rate flexibility and safeguard external stability. Banking-sector restructuring should be anchored in a credible and comprehensive strategy, with a well-managed cleanup of the sector needed to safeguard macro-financial stability and support investment.
"Staff projects economic growth to slow to 3.5 percent in FY2027 and weaken further to below 3 percent over the medium term in the absence of decisive reforms to strengthen revenue mobilization and create fiscal space, and to address weaknesses in the banking sector. Risks to the outlook are tilted to the downside, reflecting the potential interaction of banking sector strains, fiscal challenges, and external pressures.
"The team expresses its sincere appreciation to the Bangladeshi authorities and other counterparts for their warm hospitality and constructive and open discussions, and looks forward to continued engagement.
