B Mirror Report: Bangladesh has sought support from the International Monetary Fund (IMF) to cope with mounting global economic pressures triggered by the ongoing conflict in the Middle East. Discussions also focused on the release of the next tranche under the country’s existing loan programme, expected in June.

The issues were highlighted during a meeting between Finance Minister Amir Khasru Mahmud Chowdhury and Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, currently visiting Dhaka. Briefing reporters after the meeting at the Finance Ministry on Tuesday, the minister said the economy is facing multiple challenges, including the impact of the war, weaknesses in the banking sector, volatility in the capital market, and a low tax-to-GDP ratio.

He said discussions with the IMF also covered the implementation of necessary reform programmes to address these challenges. However, he noted that it would not be feasible to meet all loan conditions simultaneously, adding that the conditions would be fulfilled gradually in line with the country’s realities.

Krishna Srinivasan did not explicitly confirm a request for fresh loans but indicated that financing and policy discussions are progressing in parallel. He said any financial assistance is linked to policy reforms and that constructive engagement with Bangladesh is ongoing.

Sources said significant progress on the loan programme could be made during the IMF Spring Meetings in Washington in April. An IMF mission is expected to visit Dhaka afterward to prepare an assessment report for submission to the IMF Executive Board. Although Bangladesh aims to secure the next tranche in June, it may be delayed until July.

Bangladesh’s $4.7 billion IMF loan programme began on January 30, 2023, and was later expanded to $5.5 billion. So far, $3.64 billion has been disbursed in five tranches, leaving $1.86 billion yet to be released. The sixth tranche, originally due in December last year, remains pending.

The finance minister said that despite pressure on the energy sector due to the conflict, the government managed to ensure smooth Eid travel and maintain stable prices of essential commodities. However, he acknowledged that progress in development projects has slowed and will be reassessed.

He added that measures such as economic liberalisation, ease of doing business, and cost-cutting initiatives are being undertaken to stabilise the economy, which will be reflected in the upcoming budget.

Calling for public cooperation, the minister said the government alone cannot tackle the challenges and urged collective efforts and restraint to navigate the situation.

Krishna Srinivasan also noted that ongoing global conflicts have created uncertainty in the world economy, affecting Bangladesh as well. He reaffirmed that the IMF will continue to work closely with Bangladesh and extend its support in the coming period.