Bangladesh economy to expand 6-6.4% annually from 2024 to 2026: S&P

27 Jul '23

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S&P Global Ratings has lowered Bangladesh's long-term rating outlook to negative from stable, citing risks, and expects the economy to expand by 6-6.4 per cent annually between 2024 and 2026.
It reaffirmed its BB- long-term and B short-term sovereign credit ratings, saying these could be lowered if external debt or liquidity metrics worsened further.

Bangladesh's long-term rating outlook was recently lowered by S&P Global Ratings to negative from stable, citing risks, and the ratings agency expects the country’s economy to expand by 6-6.4 per cent annually between 2024 and 2026.

The country’s external liquidity position could deteriorate next year, while foreign exchange reserves are under pressure, it said.

Bangladesh's gross domestic product (GDP) growth fell to 6.03 per cent in the fiscal ended June this year and its dollar reserves have shrunk by more than a third since Russia's invasion of Ukraine to stand at $29.85 billion as of July 19.

S&P reaffirmed its BB- long-term and B short-term sovereign credit ratings on Bangladesh, but said these could be lowered if external debt or liquidity metrics worsened further.

"Lower generation of current account receipts than we expect, a higher overall current account deficit than we forecast, or a failure to materially boost foreign exchange reserves would indicate downward pressure on the rating," S&P was quoted as saying by Bangladeshi media reports.

The country needs favourable trade and financial flows to stabilise its external settings in the next 12 months, it added.

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