Dhaka: Finance Adviser Dr Salehuddin Ahmed today stated that discussions are ongoing with various international development partners, including the IMF, ADB, IDB, and the World Bank, to secure support in various sectors in line with the country's demands. Currently, two agreements are expected to be signed soon with the World Bank, while the rest are progressing as usual under ongoing commitments. The Finance Adviser highlighted that future negotiations would focus on demonstrating progress under the IMF pipeline and outlining the government's future plans. After the new government takes office, it will make major decisions regarding future borrowings and project implementation.
According to Bangladesh Sangbad Sangstha, Dr Salehuddin was responding to reporters' queries after chairing a meeting on the Advisers Council Committee on Government Purchase at the Bangladesh Secretariat. On his upcoming visit to the World Bank and IMF annual meetings, he mentioned that the government has already exceeded the borrowing ceiling set by the International Monetary Fund in external borrowings. Development partners' concerns over debt sustainability are understandable and rooted in ensuring prudent financial management.
Dr Salehuddin explained that around $4 billion additional funds have been used, exceeding the ceiling, but overall progress has been shown. The borrowing limit was introduced to maintain the country's debt sustainability and repayment capacity. If borrowings grow too rapidly, there is a risk of inefficiency and wastage, making the concern of development partners quite genuine.
The IMF has set a maximum $8.44 billion ceiling for foreign borrowing for Bangladesh, marking the first time such a limit has been imposed by the global lender. This external borrowing limit applies to the fiscal year 2025-26 and is a key benchmark Bangladesh must meet to secure subsequent loan installments. The new condition was revealed in the IMF's 'Bangladesh Country Report,' published recently after the approval and release of the fourth and fifth tranches of the loan, totaling $1.34 billion.
The report stipulates quarterly ceilings to closely monitor the country's debt management. A maximum of $1.91 billion in external borrowing is allowed in the first three months, $3.34 billion by the six-month mark, $4.34 billion after nine months, and the overall limit of $8.44 billion for the full fiscal year. This borrowing limit was not part of the original $4.7 billion IMF loan program approved in 2023, but was set based on the IMF's latest Debt Sustainability Analysis.
According to the Debt Sustainability Analysis, the debt-to-export ratio soared to 162.7 percent in the FY2023-24, significantly surpassing the projected 116-118 percent range.