Bangladesh economy heading for a major crisis, IMF imposes ceiling on further borrowing

By Our Correspondent

Agartala, September 28, 2025

Bangladesh’s fragile economy, already struggling amidst near total lawlessness in the country, seems to be hurtling down towards a major crisis with the International Monetary Fund (IMF) imposing a ceiling on further borrowing from international financial organizations and foreign countries. The IMF’s latest official communication to Bangladesh government has directed the country’s interim government that it can not draw more than 8.44 billion US dollar of loans from IMF, World Bank, Asian Development Bank and other sources in the rest of the current financial year-that is, 2025-2026. In June this year the Bangladesh government had drawn the latest tranche of 5 billion US dollars of loan from the IMF, pushing up the country’s total debt to a whopping 112.15 billion US dollars which is hardly manageable in the light of the country’s present economic health.

Responding to the IMF’s latest directive the Finance Adviser Dr Salehuddin Ahmed noted that Bangladesh’s dollar reserves are still inadequate for emergencies. On September 23, after a cabinet committee meeting, he said Bangladesh Bank’s decision to purchase dollars from the market was appropriate.

According to IMF figures, foreign exchange reserves now stand at $26.39 billion, while Bangladesh Bank estimates $31.27 billion. Between September 1 and 23, remittances reached $2.2 billion, up 17.6% year-on-year. From July 1 to September 23, remittances totaled $7.06 billion, an 18.2% rise from the same period last year.

But this provides only cold comfort to the crisis ridden economy of the country as economists argue that Bangladesh’s priority must be to reduce reliance on debt. Enhancing revenue mobilization, diversifying exports, and attracting foreign investment are essential for building a stronger economic foundation.

The IMF’s condition, therefore, is more than a borrowing cap—it is a wake-up call. Fifteen years of debt-driven growth are now creating new pressures. Unless the government expands domestic revenue, foreign borrowing may no longer serve as a lifeline but instead become a source of economic crisis.

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