Key Points

The IMF's executive board recently approved the long-delayed fourth and fifth tranches of the loan as Bangladesh will receive nearly $1.34 billion from the $4.7 billion loan programme.

Reports suggested that citing unmet conditions due to rising political unrest and growing economic concerns following the fall of the Awami League government in August 2024, the IMF had halted the fourth tranche scheduled to be delivered in December.

"Everyone, including the IMF, is satisfied that an election date has been announced. The IMF asked me whether the election will be held in February or not. They are wondering about it. We did tell them that it will [be held in February]," Bangladeshi media outlet Bdnews 24 quoted the Finance Advisor as saying.

Last year, the IMF released $1.15 billion providing $2.31 billion in loans to Bangladesh in the first three tranches.

Following the release of the fourth and fifth installments of its loan on Monday, the IMF stated the economic outlook of Bangladesh has worsened during the interim government led by Muhammad Yunus due to persistent political uncertainty, continuation of tighter policy mix, rising trade barriers, and increasing stress in the banking sector.

"Financial sector policy should prioritise safeguarding stability and addressing rising vulnerabilities. Developing a comprehensive, sequenced strategy to guide reforms is an immediate priority, followed by the swift implementation of the new legal frameworks to enable orderly bank restructuring while protecting small depositors," said the IMF.

"Sustained structural reforms are essential for Bangladesh to achieve its goal of attaining upper-middle-income status. Key priorities include diversifying exports, attracting greater foreign direct investment, strengthening governance, and enhancing data quality," it added.

The Yunus-led interim government in Bangladesh, already facing severe political and security challenges, has come under huge criticism from its own stakeholders for failing to carry out the promised economic reforms in the restive country.

Analysts reckon that Bangladesh's economy continues to face severe challenges amidst the huge unrest in the country since August 2024 with the business sector in the country facing a huge liquidity crunch and numerous commercial and industrial establishments shutting down.

- IANS