IMF projects 3.5% growth for Bangladesh economy this year

The International Monetary Fund (IMF) has projected that Bangladesh's economy will grow by 3.5 percent in the current fiscal year (2026-27) amid continued fiscal and financial sector pressures.

The IMF made the forecast after its team visited Dhaka following a request from the government for a new economic reform loan programme to replace the $5.5 billion loan approved in January 2023.

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The visit provided an opportunity to take stock of recent developments and discuss the authorities' reform priorities, the IMF said in a statement today marking the end of the visit.

"Bangladesh continues to face significant fiscal, financial sector and inflation challenges. These pressures have been compounded by the war in the Middle East, which has increased import and subsidy costs and renewed inflationary pressures amid elevated banking sector stress," it said.

Last week, the Asian Development Bank (ADB) cut its forecast for Bangladesh's economic growth to 4.5 percent for the current fiscal year from its previous projection of 4.7 percent.

The IMF, in its statement, said advancing reforms to strengthen revenue mobilisation and address weaknesses in the banking sector would help improve the medium-term outlook.

The IMF said its team held "constructive discussions" with the Bangladesh authorities on recent economic developments and their policy priorities. Discussions on the possible parameters of a new arrangement, including its size and associated reform commitments, will take place in the coming months, it said.