Govt may reconsider IMF loan if tougher conditions imposed

Finance Adviser Dr Salehuddin Ahmed has said that if the International Monetary Fund (IMF) imposes new or stricter conditions for disbursing promised loans, the government will reconsider whether to proceed with borrowing. Instead, alternative sources of financing will be explored, as Bangladesh’s economy is now more stable than before.

He made the remarks on Tuesday (October 14) while speaking to journalists on the second day of the IMF’s annual meeting.

The Finance Adviser said that if the IMF sets any new conditions or imposes stricter terms, the government will reassess its decision. He added that the decision on whether to seek budget support has not yet been finalised. “If the IMF’s conditions are not favourable for the country, the government will focus on alternative sources for support,” he said.

According to him, the government is working to secure alternative budgetary support, with opportunities available from organisations such as the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).

He further stated that Bangladesh is currently under an ongoing IMF programme, but whether to enter a new one will depend on the government’s decision.

Following the economic shock after the COVID-19 pandemic and the continuous decline of reserves, the previous government sought IMF support in 2022, signing a $470 crore loan package under several conditions. Later, after the mass uprising in 2024, the interim government signed an additional $80 crore loan deal, which subsequently led to increasing reform-related conditions from the IMF.

The Adviser said that alongside the World Bank-IMF annual meeting, discussions with several other international institutions have been fruitful. “We have already held talks with the World Bank, IMF, ADB, and OPEC on development loans, grants, and budget support. In continuation, exchanges are ongoing on future cooperation and reform programmes,” he said.

He noted that a recent meeting with the ADB Vice President was productive, with more meetings scheduled.

“Compared to where we stood last year, Bangladesh’s position is now much stronger. Economic stability has returned, the foreign exchange market and reserves have improved, inflation has eased somewhat, and business activities have regained momentum,” the Adviser claimed.

He also said that the government is implementing wide-ranging reforms in sectors including banking, which have been discussed in detail with development partners. “The reform process is still ongoing, and strengthening the regulatory framework will take some time,” he added.

According to him, discussions have also focused on ensuring continuity of reforms and setting directions for the next government to tackle future challenges, with special emphasis on enabling the new generation to benefit from these reforms.

Salehuddin Ahmed said, “The positive transformation of our economy is now visible on the international stage. Two new projects with the World Bank have been finalised, which will add a new dimension to Bangladesh’s development journey.”

He expressed optimism that if the current stability and reform process continue, Bangladesh’s economy will perform even better in the coming years.