World Bank pledges ‘all-out support’ to help Bangladesh bridge fiscal gap

The World Bank (WB) has committed to providing comprehensive assistance to Bangladesh, encompassing both policy reforms and direct funding, to help the country navigate its current economic challenges.

Finance Minister Amir Khosru Mahmud Chowdhury shared this optimism on Monday following a high-level meeting with World Bank officials on the sidelines of the IMF-World Bank Spring Meetings in Washington. This marks his first attendance at the global lender's summit as the Finance Minister.

Speaking to reporters, the finance minister emphasised that the discussions focused heavily on the background of the current macroeconomic landscape in Bangladesh.

"The current economic context of Bangladesh is clear to everyone. We discussed in detail how the Bangladesh-World Bank partnership can be utilised to overcome the current challenges," the minister said. He described the response from the multilateral lender as "highly positive," noting that talks have already progressed toward the implementation phase of various support measures.

The minister highlighted that external shocks, particularly global conflicts, have severely strained the national exchequer. He highlighted that the World Bank is prepared to offer "all-out support" through both policy-based lending and direct project funding to stabilize the fiscal position.

When asked whether there would be a breakthrough regarding the release of the remaining tranches of the IMF loan, the finance minister hinted at broader prospects.

"Let’s wait a little. The release of a tranche is just one component under a specific programme. We are expecting something much more significant than that. I am hopeful for a very positive outcome," he remarked.

Khosru also noted that detailed discussions were held regarding the steps to be taken through June next to address the current economic situation.

He expressed confidence that the government would be largely successful in mitigating the deficit and restoring balance to the economy in the short term.

It is mentionable that Bangladesh signed a U$4.7 billion loan agreement with the IMF on 30 January 2023, amid economic strain triggered by the Covid-19 pandemic and the Russia-Ukraine war.

The IMF later extended the programme by six months in June last year and added $800 million, bringing the total package to U$5.5 billion.

So far, Bangladesh has received U$3.64 billion under five tranches: U$476.3 million in February 2023, U$681 million in December 2023, U$1.15 billion in June 2024, and U$1.33 billion in June 2025, leaving U$1.86 billion yet to be disbursed.

The IMF had been due to release another tranche last December but withheld it pending discussions with an elected government.

High-powered Bangladesh delegation is now staying in Washington, DC led by the finance minister for joining the Spring Meetings of IMF-WBG. Finance Secretary Dr Md Khairuzzaman Mozumder, NBR Chairman Md Abdur Rahman Khan, Basumati Group Managing Director ZM Golam Nabi-CIP and senior officials of the ministries and divisions are members of the panel. The Spring Meetings began on April 13 and will conclude on April 18.

During the World Bank’s Annual Meetings last October, the country was under an interim administration led by Professor Muhammad Yunus. At the time, the International Monetary Fund (IMF) made it clear that no further disbursements would be made ahead of the elections.

Following the BNP’s landslide victory in the 12 February polls, an IMF delegation, led by Asia and Pacific Department Director Krishna Srinivasan, visited Dhaka in the last week of March, signalling confidence in the new government formed under the leadership of Tarique Rahman.

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