The International Monetary Fund on Monday said that the timely formation of an interim government in Bangladesh had helped stabilise the political and security conditions, fostering a gradual return to normalcy in the economy.
It, however, observed that the economic activity had slowed markedly, while inflation remains at double-digit levels, owing to the recent turbulence and major floods.
The IMF made the observation after a mission led by Chris Papageorgiou concluded the weeklong visit in the capital to discuss recent developments and the authorities鈥� reform priorities.
The deterioration in the balance of payments has put additional pressure on foreign exchange reserves, according to release by IMF on the day.聽
Concurrently, tax revenue collection has declined, while spending pressures have increased, and domestic payment arrears have accumulated, said the release.
Financial sector vulnerabilities have become more pronounced.
In this context, the authorities and IMF staff have held open and productive discussions on the policies and reforms needed to address these emerging challenges.
鈥榃e support the authorities' efforts to initiate policy adjustments, including continued monetary tightening and rationalising non-priority capital spending, in response to these challenging circumstances,鈥� said IMF.
It said that within the framework of the ongoing IMF-supported programme, IMF will continue to work closely with the authorities to advance Bangladesh鈥檚 reform agenda, which aims to ensure macroeconomic stability, promote job creation, strengthen institutions, and foster strong, sustainable, and equitable growth.
It has been reported that Bangladesh sought $3 billion fresh loan from the IMF in addition to the current $4.7 billion loan progarmme taken by the Hasina regime ousted in a student-led mass uprising.
The IMF has already disbursed around $2.3 billion since 2023.
In it release, IMF said it was deeply saddened by the loss of lives and injuries during the recent mass uprising and stand in solidarity with the people of Bangladesh during these difficult times.
