According to Ministry of Finance sources, Bangladesh has met all IMF conditions except for net reserves. While IMF targets for primary balance and external payments arrears were achieved, net reserve targets were not met, despite revisions. Structural measures, including risk management unit consolidation and savings bond reduction, were implemented. Revenue collection lagged slightly in the second tranche, yet IMF understands global factors affecting reserves. Zahid Hossain, former chief economist of the World Bank’s Dhaka office, suggests no issue with the third installment despite reserve targets. IMF discussions may include exchange rates, budget priorities, fiscal policy, bank mergers, and monetary policy. The loan program, approved on January 30, 2023, comprises $4.7 billion, with installments disbursed over 42 months, ending in 2026. Initial disbursements totaled $1.17 billion, with the third tranche expected in May, contingent upon meeting reform targets.

The government has set a target to increase capital expenditure in the medium term, aiming to spur sustained economic growth. According to a UNB report, capital expenditure is projected to rise to 6.68% of GDP by the fiscal year 2025-26, up from 6.41% in 2024-25 and 6.50% in the current fiscal year. This investment is channeled through either the Annual Development Program (ADP) or non-ADP capital expenditure, with a focus on enhancing infrastructure, establishing a social protection system, and alleviating constraints on private investment. The ADP, a key source of public sector capital formation, has seen varying implementation rates in recent fiscal years, ranging from 76.0% to 88.6% of budget allocation and contributing 3.6% to 4.7% of GDP. To enhance implementation efficiency, the government has introduced measures such as the iBAS++ digital platform and granting project directors authority over government fund disbursements. These initiatives aim to optimize project fund utilization, minimize wastage, and expedite implementation, aligning with the objectives of the 8th Five Year Plan.

The government plans to expand its social safety net programmes by approximately four lakh beneficiaries to aid more impoverished individuals amidst enduring inflationary pressures. Despite allowances remaining unchanged due to fund constraints, this decision aims to alleviate the cost-of-living crisis in Bangladesh, where inflation has persisted above 9% for 13 months. Specifically, the old age allowance and the allowance for widows, deserted, or destitute women will witness an increase in beneficiaries. For instance, in the ongoing fiscal year, around 58.01 lakh elderly individuals receive Tk 600 monthly, with their numbers set to rise by two lakh in 2024-25. Similarly, the Widow, Deserted, or Destitute Women programme, allocated Tk 1,711 crore for 2023-24, will accommodate an additional two lakh beneficiaries. Despite these expansions, certain schemes like the Mother and Child Benefit Programme will see an increase in allowances, aiming to provide better support to vulnerable demographics.