Economy
Bloomberg lauds PM Sheikh Hasina for reforms to maintain economic stability
The globally famed Bloomberg news agency has praised Bangladesh Prime Minister Sheikh Hasina for her “timely reform steps” to negate the impacts of the worldwide economic crisis in Bangladesh, predicting the initiatives to elect her government for the fourth straight term in the next general elections.
“She is expected to win a fourth straight term in the elections,” BSS reports quoting Bloomerg’s article, which simultaneously suggests Sheikh Hasina “needs to push more reforms to receive all funds.”
“Prime Minister Sheikh Hasina is widely expected to win a fourth straight term in national polls expected by January 2024 — not least because many of her opponents are behind bars or ensnared in legal cases”.
Bloomberg published the article against the backdrop of Bangladesh’s receipt of International Monetary Fund (IMF) loans which it attributed to the South Asian country’s timely reforms to maintain economic stability ahead of the next national election.
The article commented that Sheikh Hasina’s victory was expected not merely “because many of her opponents are behind bars or ensnared in legal cases” but due to her success in ensuring economic stability.
Following is the full Bloomberg article headlined “Bangladesh Leader Bets IMF-Mandated Rigor Will Pay Off in Polls” with two sub-heads:
Sheikh Hasina needs to push more reforms to receive all funds
She is expected to win a fourth straight term in the elections
Government leaders across the world have often balked at implementing reforms agreed with the International Monetary Fund for fear of being penalized at the ballot box. Bangladesh Prime Minister Sheikh Hasina isn’t one of them.
Her quick execution of IMF mandates have stood out in South Asia where Pakistan is still fiddling with fuel subsidies just as it inches closer to reviving a bailout. Sri Lanka has delayed local municipal polls as it raised taxes and interest rates to clinch IMF funds last week.
Bangladesh, which in July became the last of the three countries to ask for IMF support, was the first to get loans approved after swiftly raising energy prices. Prime Minister Sheikh Hasina made no apologies for the move.
“Gas and electricity supply can be provided if all agree to pay the purchasing costs,” she said a week $4.7 billion in IMF loans were secured on Jan. 31. “How much subsidy can be given? And why should we continue subsidies?”
Such comments are typically unheard of as elections approach: All three nations face key votes over the next 18 months. But unlike leaders in Sri Lanka and Pakistan, PM Sheikh Hasina is widely expected to win a fourth straight term in national polls expected by January 2024 — not least because many of her opponents are behind bars or ensnared in legal cases.
“If the ruling party manages to maintain economic stability, that could preempt anger or public sentiment that works against the government,” said Michael Kugelman, director of the Wilson Center’s South Asia Institute. “PM Sheikh Hasina certainly has the credibility to pull this off.”
In contrast, Pakistan Prime Minister Shehbaz Sharif polled low in a survey ahead of elections later this year and has been blamed by voters for the economic crisis. While Sri Lankan leader Ranil Wickremesinghe has pushed through reforms, he depends on the support of a party run by a powerful clan and will need to seek a new mandate in presidential elections due September 2024.
PM Sheikh Hasina is banking on her government’s move to go to the IMF to show to markets and voters that she has prevented the $460 billion Bangladeshi economy from going the way Sri Lanka has with a default. Pakistan is also facing the prospect of a default.
Bangladesh went to the IMF as it grappled with an energy crisis with commodity prices soaring last year due to Russia’s war in Ukraine, while the rising costs of imports widened the trade deficit. The local currency depreciated by a fifth and reserves fell to the lowest in three years.
By winning access to IMF funds, Sheikh Hasina’s government is gaining some time to fix the economy before the elections. Signs of a weakening economy could well trigger public anger against the premier who has overseen growth of more than 6 pecent on average for the past 14 years though it slowed to about 3.5 percent during the pandemic.
The first review of the IMF program is set for the second half of 2023, and Bangladesh Mission Chief Rahul Anand sees the authorities “taking comprehensive steps” to unwind subsidies and move to a market-driven exchange rate.
Bangladesh has received $476 million under the facility so far. Further disbursements depend on the government ensuring reforms for the financial sector, ranging from the central bank pursuing an independent monetary policy to reducing non-performing loans and spurring climate change funding.
The International Monetary Fund (IMF) has projected that Bangladesh’s gross domestic product (GDP) will grow by 3.2 per cent in the 2026-27 fiscal year, while average inflation could rise to 10.9 per cent, signalling mounting pressure on the country’s economy.
The projections were outlined in the IMF’s World Economic Outlook (WEO) report, released on Tuesday.
The latest growth forecast marks a significant downward revision from the 4.3 per cent projected by the IMF in April. The fund had subsequently forecast growth of 3.5 per cent in July before lowering its estimate further to 3.2 per cent.
The IMF has also sharply revised its inflation outlook for Bangladesh. In April, it projected average inflation of 6 per cent for the 2026-27 fiscal year. The latest estimate raises that figure to 10.9 per cent.
The combination of slower economic growth and persistently high inflation points to continued pressure on Bangladesh’s macroeconomic stability.
Bangladesh growth outlook trails other forecasts
The IMF’s latest growth projection for Bangladesh is lower than those of other major international development institutions.
The World Bank has forecast GDP growth of 3.4 per cent for Bangladesh in the 2026-27 fiscal year, while the Asian Development Bank (ADB) has projected growth of 4 per cent.
According to the IMF, Bangladesh’s economy grew by 3.6 per cent in the 2025-26 fiscal year, following growth of 3.5 per cent in the preceding fiscal year.
India, Bhutan expected to grow faster
The IMF has projected stronger economic growth in neighbouring countries, with India’s economy expected to expand by 7 per cent and Bhutan’s by 6.9 per cent in the relevant fiscal year.
The contrasting forecasts highlight the challenges facing Bangladesh as it seeks to restore economic momentum while tackling persistent inflation.
The IMF’s latest projections come as the annual meetings of the IMF and the World Bank Group are underway in Bangkok, Thailand.
Bangladesh’s economic situation, reform programmes and efforts to secure financing from development partners are among the key issues receiving attention during the meetings.
The World Bank supports the Bangladesh government’s policies to address the country’s current economic challenges, restore stability and implement medium- and long-term development plans, Finance Minister Amir Khasru Mahmud Chowdhury said on Tuesday.
He said the global lender was broadly aligned with Bangladesh’s economic programmes and policy priorities and would continue to support the country’s economic recovery and future development.
The finance minister made the remarks while speaking to journalists after a meeting with a World Bank managing director in Bangkok, Thailand, on October 13.
Amir Khasru said Bangladesh’s economy was facing significant challenges when the current government took office. Alongside dealing with the financial and economic burdens inherited from the previous period, the country was also having to navigate global economic disruptions caused by ongoing wars and geopolitical tensions.
He said the World Bank understood the realities facing Bangladesh and supported the government’s policy approach to overcoming the economic difficulties.
“The World Bank is aligned with the programmes and policy direction we have set to restore economic stability and ensure future development,” the minister said, adding that both sides would continue working together.
He said the World Bank was willing and prepared to provide the assistance Bangladesh needed.
No decision yet on proposed $10 billion in additional assistance
Clarifying reports that Bangladesh had sought an additional $10 billion in assistance from the World Bank, the finance minister said no final decision had been made.
He said discussions with the lender were ongoing and that possible proposals would be reviewed in light of those discussions. The process could take several months to complete, he added.
“No decision is being made at this stage. I have seen several inaccurate reports here and there. This is a discussion, and there will be follow-up based on these talks. It is a process that will continue over the next few months,” he said.
The minister stressed that the ongoing discussions should not be interpreted as a final agreement. Rather, they were intended to establish a basis for determining the next steps and considering possible decisions.
Further discussions would also take place in Dhaka, he said.
Expressing satisfaction with the progress of the talks, Amir Khasru said Bangladesh was in a favourable position to establish a framework for future cooperation.
He reiterated that the government’s economic policies, programmes and medium- and long-term development plans were broadly aligned with the World Bank’s position.
Government’s economic agenda aligned with BNP manifesto
The finance minister also said the World Bank’s position was consistent with the government’s economic plans and the Bangladesh Nationalist Party’s (BNP) election manifesto.
He said discussions were underway on how to address the country’s economic challenges and achieve the government’s development objectives.
According to the minister, the government has submitted a written proposal outlining a framework for partnership with the World Bank. Discussions on the proposed framework will continue.
He said the World Bank had provided various recommendations and suggestions, while Bangladesh had also presented its own proposals and recommendations.
Further discussions would be based on these submissions, he added.
Government optimistic about inflation and GDP targets
Asked about forecasts by the World Bank and the Asian Development Bank (ADB) on inflation and gross domestic product (GDP) growth, and how they compared with the government’s targets, the finance minister said the government did not intend to dispute the projections made by other institutions.
He said the institutions had prepared their forecasts based on their own calculations and analyses, adding that the country’s economic performance would become clearer as progress on key indicators was assessed over time.
“We do not want to dispute anyone’s projections. They have made their estimates based on their own calculations. We are carrying out our work, and they are doing theirs. What matters most is that the cooperation we need continues,” he said.
The minister expressed optimism that the government would be able to meet the inflation targets set out in the national budget.
He said the government was working to restore economic stability through continued engagement with the World Bank, implementation of its economic policies and progress on medium- and long-term development plans.
Bangladesh has sought financial assistance from the World Bank to help meet rising energy costs amid global economic uncertainty, Finance Minister Amir Khasru Mahmud Chowdhury said on Monday.
Speaking to reporters in Bangkok on the sidelines of the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group, the minister said discussions with the World Bank were underway on possible financial support. Work was also progressing on a proposed framework agreement between the two sides, he added.
The minister expressed hope that the World Bank would continue to support Bangladesh as the country navigates mounting economic challenges.
He said global instability had increased the financial burden on Bangladesh’s energy sector, making additional support important to help manage the rising costs. According to the minister, the World Bank had responded positively to discussions on possible assistance.
Bangladesh’s engagement with the lender should go beyond existing funding arrangements and ongoing development projects, he said, stressing the need for broader cooperation to address the economic pressures arising from global uncertainty and higher energy expenditure.
Framework Agreement Under Discussion
Bangladesh and the World Bank are also working towards a framework agreement to strengthen their partnership, the minister said.
Discussions and related procedural work are continuing, with further steps dependent on progress in negotiations and agreement between the two sides.
The minister also emphasised the need to align development initiatives supported by international partners with the government’s election manifesto and national development priorities.
He said coordination between government policies and external assistance would be important in advancing Bangladesh’s economic objectives.
Bangladesh’s IMF Engagement Also in Focus
The possibility of a new lending programme with the IMF is another issue of interest for Bangladesh during the annual meetings, scheduled for October 12-18.
The meetings bring together finance ministers, central bank governors and senior officials from international financial institutions to discuss global economic developments, financing needs and development priorities.
For Bangladesh, a potential new IMF programme could provide additional external financing and support efforts to maintain macroeconomic stability. However, the size, terms and timeline of any new arrangement have not been formally confirmed.
Rising Global Costs Put Pressure on Bangladesh
Geopolitical tensions, volatile energy markets, inflation and higher borrowing costs continue to pose challenges for economies worldwide, particularly those heavily dependent on imports.
For Bangladesh, higher energy import bills can increase pressure on foreign exchange reserves and complicate government expenditure planning.
While financing from international development partners could help ease some of these pressures, sustained economic stability also depends on stronger revenue collection, improvements in the banking sector, more efficient public spending and a business environment conducive to investment.
Bangladesh’s participation in the annual meetings is therefore focused not only on securing financial assistance but also on strengthening development partnerships and exploring ways to address immediate economic pressures while pursuing longer-term development goals.
The outcome of the discussions with the World Bank, along with any progress towards a new IMF lending arrangement, will be important in determining the extent of additional external support available to Bangladesh.
