The International Monetary Fund (IMF) and the World Bank have initiated a joint revenue mobilisation programme to support Bangladesh in meeting its ambitious fiscal targets, amid persistent shortfalls in tax income and growing economic vulnerabilities.

Speaking at a virtual press briefing on Sunday, Chris Papageorgiou, IMF Mission Chief for Bangladesh, acknowledged the country’s long-standing struggle with low revenue generation. He said both multilateral lenders would coordinate efforts under a newly launched initiative focused on four key areas, including structural reforms and policy enhancements.

“This is starting now,” said Papageorgiou. “We are in discussions with the authorities. It is the joint revenue mobilisation initiative… to turn the corner there, though that is challenging.”

The joint plan includes restructuring the National Board of Revenue (NBR) by separating policy formulation from revenue administration. The effort is being rolled out in the context of Bangladesh’s $4.7 billion loan programme with the IMF, under which the country is expected to mobilise Tk 2.4 trillion in revenue by December 2025—a target economists have called highly unrealistic.

Acknowledging the difficulty, Papageorgiou said: “We are at a critical juncture. The targets are ambitious but achievable. Performance so far has been disappointing, but the authorities are making efforts, even if some have come up short.”

He also highlighted broader challenges facing the economy, including political uncertainty linked to electoral timelines, global economic conditions, and ongoing domestic reforms.

On foreign direct investment (FDI), Papageorgiou noted that investor confidence tends to lag during uncertain political transitions. However, with Bangladesh’s electoral timeline becoming clearer, he expects external investment flows to stabilise.

Discussing the country’s exchange rate regime, he described the newly introduced crawling peg with a band as a transitional mechanism toward eventual full flexibility. “This design is appropriate for Bangladesh’s current stage of development,” he said, adding that further reforms would be needed to strengthen the system before transitioning fully.

Turning to inflation, Papageorgiou expressed dissatisfaction with the persistently high rate. He welcomed the central bank’s tightened monetary policy aimed at bringing inflation within the 5.0 to 6.0 percent target range.