Bangladesh to borrow US$2 billion from IMF & World Bank by June

In July 2026, Bangladesh may receive a loan of US$2 billion from International Monetary Fund (IMF) and World Bank to mitigate economic pressures due to ongoing Middle East conflict, officials said.

Bangladesh has earlier sought the amount from IMF and World Bank Group to overcome the short-term economic challenges.

Following meetings with senior officials of both organisations on the sidelines of the IMF–World Bank Spring Meetings in Washington, Finance Minister Amir Khosru Mahmud Chowdhury shared updates on the negotiation.

Bangladesh previously borrowed from the IMF, the latest being worth US$5.5 billion, and another US$1.3 billion that is due in June 2026. The World Bank has also pledged to offer US$400 million in budget support.

During his address to the media, the minister said that the World Bank will offer support in policy-making and funding to devise solutions for current economic deficits and the impact of the Middle East war.

The IMF earlier announced up to US$50 billion in emergency support for developing and low-income countries. On the World Bank pledged up to US$25 billion in financial assistance.

Current tensions in the Middle East have brought about serious ramifications in the country. The region is one of the largest contributors of remittance. Around seven million Bangladeshis reside in Middle Eastern countries, according to the Bureau of Manpower, Employment, and Training (BMET). Nearly half of Bangladesh’s more than US$30 billion in annual remittances come from the Gulf countries. However, the flow is expected to take a hit due to the conflict.

Furthermore, Bangladesh relies heavily on the Gulf nations, particularly Qatar, for LNG imports, a report by Observatory of Economic Complexity (OEC) revealed. Blockades at crucial shipping zones in the Strait of Hormuz, a chokepoint through which 30 percent of the world’s oil is transported, will cause insufficient fuel reserves in in the country. Globally, oil prices have been fluctuating since the start of war and stands at an all-time high. Though the government announced no change in fuel price in April, funding becomes necessary to counter the costs and prevent disrupted supply, experts say.

On the other hand, IMF suggests Bangladesh to cut down subsidies and increase energy tariffs. This will reduce the country’s monetary dependence on foreign sources and check its burgeoning US$5.5 billion loan. However, doing so would mean extra fuel expense for the common man.

Shafiqul Alam, Lead Analyst, Energy, for Bangladesh at Institute for Energy Economics and Financial Analysis (IEEFA), said that nation-wide strategies like efficiency and clean energy pose as alternatives that can help curb this growing fuel crisis.

“Instead of passing all costs on to the consumers, the Bangladesh government must focus on enhancing energy efficiency and reducing wastage. For instance, by limiting losses due to leakage and pilferage —referred to as unaccounted for gas — amounting to more than 70 billion cubic feet per annum, Bangladesh may slightly reduce capacity payments by redirecting part of this saved gas to independent power producers (IPPs) operating at lower capacity, thereby reducing power generation cost”

“The new government can refrain from adding new fossil-fuel plants and catalyse the uptake of cost-competitive renewable energy that will help limit costs by replacing expensive peaking power plants during the day.”