IMF delay signals urgent need for reform

The International Monetary Fund (IMF) is now reluctant to disburse $1.30 billion to Bangladesh under the $5.50 billion loan agreement between the IMF and the country. This instalment was initially scheduled to be released in December 2025. However, the IMF has delayed the disbursement.
Although Bangladesh is operating under an elected government, the IMF's concern is not primarily about the political structure, but rather about policy implementation. The major conditions include rationalising subsidies in the fuel and gas sectors, strengthening revenue collection and implementing reforms in the banking sector, particularly reducing non-performing loans (NPLs).
Additionally, Bangladesh has decided to provide compensation to depositors of vulnerable banks from its own revenue, a move not supported by the IMF. Instead, the IMF prefers that such protection be ensured through a structured deposit insurance scheme. Amid the Iran-Israel conflict, Bangladesh's manufacturing industries are facing operational turbulence due to the scarcity of utilities.
As a result, GDP growth may not follow the expected trajectory. In this context, Bangladesh may require additional economic assistance from the IMF, and the country is seeking to secure new facilities of around $2.0 billion alongside the ongoing loan programme, which is valid until January 2027.
This assistance is undoubtedly crucial for Bangladesh. However, to protect the public interest, the country must carefully consider the conditions before implementing the agreement, so that such facilities are not disrupted in the future and welfare initiatives are safeguarded. Since subsidies in the fuel and gas sectors help shield citizens from high utility costs, Bangladesh should pursue growth while prioritising the interests of its people.
Kawsik Azad Pronoy
A banker
kawsikdbbl@gmail.com