BD and Japan Inks ODA Loan Deal

Bangladesh signed a supplementary $6.26 million loan agreement with Korea Eximbank for the "GMDSS and IMNS Project," enhancing maritime safety infrastructure. This new loan, under Korea’s Economic Development Cooperation Fund (EDCF), complements an earlier $37.5 million agreement, bringing the total project financing to $43.76 million.

The IMF’s continued delay in disbursing the next tranche of its $4.7 billion loan to Bangladesh comes amid signs of modest economic recovery. Inflation has dropped from 11.7% in July 2024 to 9.4% in March 2025, and foreign exchange reserves have stabilized after a steep fall.

The IMF has recommended that Bangladesh replace its complex domestic minimum tax (DMT) regime, among six key proposals, as part of conditions to unlock the next tranches of a $4.7 billion loan. During a recent review, the IMF urged the National Board of Revenue to simplify the DMT so it doesn’t exceed taxpayers' actual liabilities, and to apply it without exemptions.

Bangladesh’s external debt declined by $736 million to $103.63 billion by December 2024, following the ousting of the Awami League regime and the formation of an interim government. This drop is attributed to the repayment of $3.3 billion in overdue foreign loans and a cautious borrowing strategy adopted by the new administration.

The New Development Bank (NDB), backed by BRICS nations, plans to lend $1 billion to Bangladesh in 2025, up from $320 million already approved for the Expanded Dhaka City Water Supply Resilient Project. NDB Vice President Vladimir Kazbekov confirmed the increase during a meeting with Chief Adviser Prof Muhammad Yunus in Dhaka.

The IMF, currently reviewing the release of the 4th and 5th instalments of Bangladesh's $4.7 billion loan package, has recommended key reforms to sustain economic growth and ensure macroeconomic stability.