The International Monetary Fund on Thursday said that lower-than-expected revenue generation would hamper Bangladesh鈥檚 infrastructural development and expansion of the social safety net.
The current banking sector reform will also be affected for the same reason, said IMF mission chief Chris Papageorgiou at an online press conference in the capital Dhaka on the conclusion of the mission鈥檚 16-day Bangladesh visit.
Observing that the country鈥檚 tax and gross domestic product ratio has fallen to 6.8 per cent, the IMF mission chief said that higher revenue mobilisation should be the top priority for the interim government as well as the forthcoming political government after the general elections planed for February 2026.
The IMF mission, which held meetings with leaders of the Bangladesh Nationalist Party and Bangladesh Jamaat-e- Islami, was linked to the 2025 Article IV consultation, an annual event for the member countries, and the fifth review of the $5.5 billion loan programme for Bangladesh.
However, the multilateral lender will delay disbursement of the next and sixth tranche because of the next general elections.
The IMF mission chief said that they needed consents from the next elected government regarding the continuation of the loan programme.
Describing the mission meetings with the BNP and the Jamaat constructive, the IMF mission chief said that reforms under the current loan programme should be expedited in the first year of the next government tenure.
He expected that joint tranches of sixth and seventh could be disbursed after the sixth review likely to take place in April-May in 2026.
On June 23, the IMF approved the release of the fourth and fifth tranches amounting to $1.3 billion, taking the overall amount of disbursement to $3.6 billion.
The IMF said that the GDP growth was projected to be nearly 5 per cent in the current financial year of 2025-26 and inflation was projected to remain elevated at 8.8 per cent in the same financial year.
It also said that the monetary policy should continue to focus on bringing down inflation as a slow decline in inflation warranted maintaining tight monetary conditions until inflation returns to the target range of 5-6 per cent.
Calling financial sector reforms are critical to addressing banking sector challenges, the IMF said that a credible government-wide strategy to comprehensively address weak banks should include estimates of system-wide undercapitalisation, the scope of fiscal support, and legally robust restructuring and resolution options with identified funding sources.
In addition, asset quality reviews need to be expanded to all systemically important and state-owned banks, said the IMF.
The lender also said that continued efforts were needed to improve banks鈥� governance and balance sheet transparency, strengthen the financial safety net and improve frameworks for recovering non-performing loans.
Any approach to dealing with weak banks should ensure healthy balance sheets, sustained profitability and adequate liquidity without prolonged reliance on forbearance measures, according to a press release issued by the IMF on Thursday.
