## IMF Executive Board Concludes 2025 Article IV Consultation with Bangladesh

_IMF News, January 30, 2026_

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## Bibliographic details
- Published: January 30, 2026

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### Overview
- The Executive Board completed the Article IV Consultation for Bangladesh on January 26, 2026.
- The authorities consented to publication of the Staff Report prepared for this consultation.
- Following a recent economic slowdown, GDP growth is expected to rebound to 4.7 percent in FY26 and FY27.
- The economy faces mounting macro-financial challenges from weak tax revenue and financial sector vulnerabilities, with significant downside risks from delays in implementing fiscal and financial reforms.
- Policy focus recommended: safeguarding fiscal sustainability, strengthening macro-financial stability, and implementing comprehensive structural reforms over the medium-term to strengthen governance, create jobs, and promote economic diversification.

### Macroeconomic developments (recent and FY25)
- GDP growth decelerated to 3.7 percent in FY25 from 4.2 percent in FY24 and 5.8 percent in FY23.
- Headline inflation fell from double-digit levels in early FY25 but remained elevated at 8.2 percent (y-o-y) in October.
- Tax revenue to GDP ratio fell sharply in FY25.
- Fiscal deficit was contained due to under-execution of capital and social spending.
- Foreign exchange reserves have begun to rebuild, supported by improvements in the current account.

### Outlook and risks
- With implementation of policies to mobilize tax revenue and address financial sector vulnerabilities:
  - Growth projected to rebound to 4.7 percent in FY26 and gradually accelerate to around 6 percent over the medium term.
  - Inflation projected to remain elevated at 8.9 percent in FY26 before subsiding to around 6 percent in FY27.
- Risks to the outlook are tilted to the downside, mainly from delayed or inadequate policy action and reversals of exchange rate reform and fiscal discipline.

### Executive Board Assessment (summary of Directors’ views)
- Acknowledged interim authorities’ efforts to stabilize the economy following the 2024 uprising and ahead of upcoming national elections.
- Noted mounting macroeconomic and financial challenges: weak revenue mobilization, banking sector vulnerabilities, incomplete implementation of the new exchange rate framework, and elevated inflation.
- Emphasized need for decisive and sustained policy actions and bold reforms to restore macroeconomic and financial stability and support long-term development goals.
- Stressed the importance of the new administration’s full ownership of the program, supported by early and active engagement with IMF staff and efforts to secure stakeholder buy-in.

### Key policy recommendations (directors’ priorities)
- Fiscal policy and revenue mobilization:
  - Undertake bold tax policy reforms, simplify the tax system, and strengthen tax administration and compliance to mobilize revenue.
  - Rationalize subsidies, prioritize growth-enhancing investments, enhance social safety nets, and improve public financial and investment management.
  - Strengthen financial viability of energy SOEs.
- Financial sector and banking reforms:
  - Develop a credible banking sector reform strategy consistent with international standards, including estimates of undercapitalization, definition of fiscal support, and legally robust restructuring and resolution plans.
  - Conduct asset quality reviews for all systemic and state-owned banks, advance risk-based supervision, and strengthen governance and balance sheet transparency.
  - Caution against unsecured liquidity injections into weak banks.
- Monetary and exchange rate policy:
  - Maintain a tight policy mix to continue rebuilding foreign reserves and reducing inflation.
  - Fully and consistently implement the exchange rate reform and allow greater exchange rate flexibility.
  - Keep monetary policy appropriately tight until inflation is firmly on a downward path; continue modernization of the monetary policy framework.
- Structural and governance reforms:
  - Enhance governance and transparency, strengthen anti-corruption and AML/CFT frameworks, and ensure central bank autonomy.
  - Support job creation, particularly for youth, and export diversification.
  - Continue capacity development and improvements in macroeconomic statistics.
  - Continue implementation of reforms under the RSF arrangement to help build climate resilience and mobilize climate finance.

### Selected Economic Indicators, FY2025–27 (high-level figures from Staff projections)
- Real GDP: FY25 Act. 3.7 ; FY26 Proj. 4.7 ; FY27 Proj. (around) 6 percent over the medium term (projection narrative).
- Consumption:
  - Private: FY25 Act. 10.2 ; FY26 Proj. 2.9 ; FY27 Proj. 4.5
  - Public: FY25 Act. -6.8 ; FY26 Proj. 15.0 ; FY27 Proj. 12.3
- Gross Capital Formation: FY25 Act. -8.0 ; FY26 Proj. 8.2 ; FY27 Proj. 4.9
- Trade (percent changes):
  - Exports of goods and services: FY25 Act. 0.9 ; FY26 Proj. 2.3 ; FY27 Proj. 5.3
  - Imports of goods and services: FY25 Act. -39.3 ; FY26 Proj. 42.5 ; FY27 Proj. 3.3
- Prices:
  - GDP deflator: FY25 Act. 5.6 ; FY26 Proj. 13.6 ; FY27 Proj. 11.7 (note: entries reflect table layout in source)
  - CPI inflation (annual average): FY25 Act. 10.0 ; FY26 Proj. 8.9 ; FY27 Proj. 6.0
  - CPI inflation (end of period): FY25 Act. 8.5 ; FY26 Proj. 5.5
- Central government operations (in percent of GDP):
  - Total revenue and grants: FY25 Act. 8.0 ; FY26 Proj. 10.3
  - Of which: Tax revenue: FY25 Act. 6.9 ; FY26 Proj. 7.2 ; FY27 Proj. 9.3
  - Total expenditure: FY25 Act. 10.9 ; FY26 Proj. 12.6
  - Of which: Annual Development Program (ADP): FY25 Act. 3.4
  - Overall balance (including grants): FY25 Act. -2.9 ; FY26 Proj. -4.3 ; FY27 Proj. -4.7
  - (excluding grants): FY25 Act. -3.0 ; FY26 Proj. -4.4
  - Primary balance (including grants): FY25 Act. -0.7 ; FY26 Proj. -2.0 ; FY27 Proj. -2.2
- Public sector total debt:
  - FY25 Act. 42.1 ; FY26 Proj. 42.4 ; FY27 Proj. 43.4
  - Of which: External debt: FY25 Act. 19.5 ; FY26 Proj. 19.2 ; FY27 Proj. 18.8
- Balance of Payments (in percent of GDP):
  - Current account balance: FY25 Act. 0.0 ; FY26 Proj. -0.3 ; FY27 Proj. -0.6
  - Trade balance: FY25 Act. -5.6 ; FY26 Proj. -5.5 ; FY27 Proj. -5.8
  - Capital account balance: FY25 Act. 0.1
  - Financial account balance: FY25 Act. 0.8 ; FY26 Proj. 0.7 ; FY27 Proj. 1.3
  - Foreign direct investment, net: FY25 Act. 0.4 ; FY26 Proj. 0.3 ; FY27 Proj. 0.5
- Gross international reserves (billions of U.S. dollars): FY25 Act. 26.8 ; FY26 Proj. 30.9 ; FY27 Proj. 35.8
  - in months of next year's imports: FY25 Act. 3.8 ; FY26 Proj. 3.9 ; FY27 Proj. 4.0
- Monetary and Credit (in percent of GDP):
  - Reserve money: FY25 Act. 7.5 ; FY26 Proj. 7.7 ; FY27 Proj. 8.1
  - Broad money (M2): FY25 Act. 46.5 ; FY26 Proj. 45.6 ; FY27 Proj. 45.8
  - Credit to private sector: FY25 Act. 33.2 ; FY26 Proj. 31.0 ; FY27 Proj. 30.1
  - Credit to private sector (percent change): FY25 Act. 7.9
- Savings and Investment (in percent of GDP):
  - Gross national savings: FY25 Act. 28.2 ; FY26 Proj. 27.9 ; FY27 Proj. 28.4
  - Gross investment: FY25 Act. 28.5 ; FY26 Proj. 24.1 ; FY27 Proj. 23.0
- Memorandum item:
  - Nominal GDP (in billions of taka): FY25 Act. 55,029 ; FY26 Proj. 62,637 ; FY27 Proj. 69,533

*Source: IMF Executive Board Concludes 2025 Article IV Consultation with Bangladesh, January 30, 2026.*

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## References

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_Source: https://www.imf.org/en/news/articles/2026/01/30/pr-26029-bangladesh-imf-executive-board-concludes-2025-article-iv-consultation_