Economic rating remains stable

STANDARD & Poor (S&P), the global rating agency has reaffirmed the 'BB-' long-term sovereign rating for the country. Although termed as stable, economic growth remained sluggish due to a myriad of issues that have yet to be addressed. The vulnerable areas remain infrastructure bottlenecks, political volatility and various limitations the country continues to suffer in terms of administrative flexibility and institutional weaknesses. Sustained investments are needed to improve infrastructure, while political will can bring about institutional reform. All these factors are weighing down better growth. Despite internal shocks and bottlenecks, S&P considers that Bangladesh's average GDP growth rate of 5.2 per cent as healthy.

While buoyed up by healthy remittances, the structural impediments in terms of the energy crunch and the substantial economic disruption caused by agitational politics continue to dog the economy. The confrontational politics that has become a mainstay between major contending parties is by far one of the greatest threats to smooth functioning of the economy. The national debt at present remains within acceptable limits, but the increasing use of national savings certificates with high yields instead of the issuance of commercial bonds, as a major source of government income, is beginning to have a taxing effect. 

Fiscal constraints apart, issues of good financial governance, particularly in dealing with nonperforming loans remain a cause for concern. However, the stable outlook cited six times in a row by S&P despite the trials and tribulations, particularly in the political arena, is cause for comfort.