Bangladesh Seeks IMF Aid Amid Economic Concerns Over Iran War Impact

Bangladesh Requests New IMF Assistance Programme Amid Global Economic Uncertainty

The International Monetary Fund (IMF) has confirmed that Bangladesh has requested a new assistance programme as the country grapples with the economic fallout of the ongoing conflict in Iran. According to Ivo Krznar, mission chief for Bangladesh at the IMF, staff are engaged in discussions with authorities on reform agenda and policy priorities.

Bangladesh had previously sought $2 billion in loans from various donors in March, citing an energy crisis caused by the war on Iran. The conflict has led to a global energy crisis, resulting in fuel price increases worldwide. A temporary ceasefire was reached on April 8, but a durable peace agreement remains elusive.

The Strait of Hormuz, a critical shipping route for oil and natural gas supplies, is currently under Iranian control, while the US has imposed a naval blockade on Iranian ports. This disruption has caused significant challenges to energy supplies globally, leading to increased prices. Bangladesh, which imports 95% of its oil and liquefied natural gas needs, has taken measures to curb fuel consumption.

The country’s economy is also facing challenges beyond energy supplies. The ready-made garment industry, accounting for over 80% of export earnings, has been impacted by disruptions in supply chains. Shipments from China have been delayed due to recent shipping disruptions, leading to increased import costs. Industry experts expect a decline in work orders by 20-25% in the next season.

Bangladesh’s external debt has risen in recent years as the government borrowed more to fund infrastructure projects and shore up its balance of payments. The IMF assessments indicate a moderate but growing debt burden and higher foreign-currency repayment pressures.

The size and terms of the requested financial aid package have not been disclosed, but the IMF remains committed to supporting Bangladesh’s efforts to secure lasting macroeconomic and financial stability, strengthen resilience, and promote strong, inclusive growth.

Source: Al Jazeera