BD economy to overcome Covid impact in 12 months: S&P
Industry Desk:Global Rating agency Standard and Poor’s (S&P) in a recent report said Bangladesh’s healthy economic growth is expected to overcome the risks associated with the Covid-19 pandemic over the next 12 months.
The agency also affirmed short term “B” rating and long term “-BB” rating for Bangladesh.
According to the S&P report, Bangladesh’s economy is gradually recovering, although Covid-19 risks to fiscal and external metrics are likely to persist over the coming year. “Bangladesh’s resilient economy stands out against the sovereign’s weak revenue generation capacity, which is likely to limit fiscal consolidation progress,” S&P said in a statement.
It also predicted that Bangladesh’s economic recovery momentum will continue to build over the next one to two years following a real expansion of 5.5% in the fiscal year ended June 2021.
However, a highly concentrated political landscape may constrain the effectiveness of institutions and limits checks and balances on the government.
“We expect the impact on economic growth to be much more contained than in the final quarter of fiscal 2020 because recent measures to counter the spread of the coronavirus are more calibrated and are generally lifted more quickly if infections continue to decline,” S&P statement read.
Bangladesh’s fiscal deficit is likely to remain elevated this year owing to some additional pandemic-related expenditure, along with the government’s modest revenue performance.
S&P forecast the associated change in net general government debt to average 5.6% of GDP annually over fiscals 2022-2024.
“Bangladesh’s current account deficit to increase this fiscal year to about 1.8% of GDP,” it predicted.
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