DHAKA, July 17 (Xinhua) -- The International Monetary Fund (IMF) has revised its economic forecast for Bangladesh, projecting a lower growth rate of 3.5 percent for FY27 (July 2026 to June 2027), down from its earlier estimate of 4.3 percent.
"Staff projects economic growth to slow to 3.5 percent in FY2027 and weaken further to below 3 percent over the medium term in the absence of decisive reforms to strengthen revenue mobilization and create fiscal space, and to address weaknesses in the banking sector," IMF Mission Chief for Bangladesh Ivo Krznar said in a statement on Thursday.
An IMF staff team led by Krznar visited Bangladesh from July 12 to 16 after the government requested a new IMF-supported program. The team reviewed recent economic and financial developments and discussed the authorities' reform priorities.
The IMF mission chief warned that risks to the outlook remain tilted to the downside due to the combined impact of banking sector strains, fiscal challenges and external pressures.
According to the IMF, Bangladesh continues to face significant fiscal, financial and inflation challenges. These pressures have been compounded by the Middle East conflict, which has increased import and subsidy costs and renewed inflationary pressures.
It called for maintaining tight monetary and prudent fiscal policies to curb inflation and rebuild foreign exchange reserves, alongside consistent implementation of the crawling peg exchange rate regime introduced in 2025 to enhance exchange rate flexibility and safeguard external stability.
Besides, the IMF said banking sector restructuring should be anchored in a credible and comprehensive strategy, with a well-managed clean-up needed to preserve macro-financial stability and support investment.
The IMF's cautious outlook contrasts with the World Bank's recent assessment, which projects a slightly more optimistic growth trajectory of 4.6 percent in FY27.
According to the latest Asian Development Outlook, Bangladesh's economy is estimated to grow 4.5 percent in FY27. ■
