Japan International Cooperation Agency (JICA) is following a similar approach to the International Monetary Fund (IMF) regarding budget support. Like the IMF, JICA also wants to disburse budget-support funds only after holding discussions with the next elected government. JICA officials conveyed this during a recent meeting with the Finance Division at the Ministry of Finance.

According to sources in the ministry, in the 2024–25 fiscal year JICA provided around USD 418 million in budget support to promote economic reforms and enhance climate resilience. In May, Chief Adviser Professor Muhammad Yunus visited Japan, where JICA signed agreements with Bangladesh involving USD 1.06 billion in budget support, railway development, and grant assistance—equivalent to about Tk 13,000 crore at Tk 122 per dollar.

Under the agreement, Japan would provide USD 418 million for economic reforms and climate resilience; USD 641 million for upgrading the Joydebpur–Ishwardi railway line to a dual-gauge double line; and USD 4.2 million in scholarship assistance.

Sources said JICA has recently begun discussions with the government regarding budget-support loans for the current 2025–26 fiscal year. As part of this process, a meeting was held at the Secretariat between the Finance Division and JICA officials, where the preconditions for budget support were discussed. JICA advised that the necessity of such support should be determined jointly through mutual consultations before approval.

A Finance Division official said the government must commit to specific policy reforms to receive budget support. Since the new elected government is expected to take office in February, the reforms would need to be implemented during its tenure. He added that JICA has stated it will release new budget-support funds only after receiving commitments for policy reforms from the new government.

Meanwhile, whether the ongoing USD 5.5 billion IMF loan program will continue in full will also be decided after discussions with the new government. After concluding a two-week mission, IMF’s Bangladesh Mission Chief, Chris Papageorgiou, said at a press conference last Thursday that it would be logical to allow the new government—taking office in February—to give its opinion. He said another high-level IMF mission may visit around April or May next year, and the decision on whether the joint review will move forward will be assessed then.

The original USD 4.7 billion IMF loan program was expanded by another USD 800 million last June, bringing the total to USD 5.5 billion. Under this program, the IMF has so far disbursed USD 3.64 billion in five installments, leaving USD 1.86 billion still pending. The sixth installment was expected in December.

Regarding this, Economic Adviser Dr. Salehuddin Ahmed told Medial, “The IMF and other donor agencies want to decide on budget support after consultations with the next government. We have also informed them that we do not need loan installments at this moment. They should conduct their review first.”

Meanwhile, the government is also in discussions with the Asian Development Bank (ADB) and the World Bank regarding new budget-support packages. The government hopes to receive about USD 250 million from ADB as the second installment under the Strengthening Social Resilience Program. Discussions are also underway with the World Bank for USD 300–500 million in budget support for preparations to graduate from LDC status.