There is nothing to fear of Bangladesh

  নিউজ ডেস্ক
  প্রকাশিতঃ বিকাল ০৪:৪০, বৃহস্পতিবার, ২১ জুলাই, ২০২২, ৬ শ্রাবণ ১৪২৯

After Sri Lanka's economic bankruptcy this year, There is a lot of discussion concerning Bangladesh's foreign debt at various levels following the economic crises in Sri Lanka. Looking at some economic indicators between the two countries, it is possible to realize that Bangladesh is not in danger of becoming Sri Lanka, and it is not all propaganda.


However, according to economic specialists, Bangladesh is not in that much danger because its debt-to-GDP ratio is still below the safe level of 13 percent, as opposed to Sri Lanka's close to 50 percent.  Percentage of GDP Bangladesh's national debt is much lower than that of Sri Lanka.

Sri Lanka's national debt as measured by the World Development Indicators (WDI) in 2011 was almost 70% of its GDP. The percentage increased dramatically to almost 100% in 2021 as the economic crisis worsened.

On the other hand, during the same time period, Bangladesh's national debt is substantially lower, standing at roughly 40% of its GDP in 2021. But the US and Japan have likewise consistently had high debt-to-GDP ratios.

According to the data Bangladesh's GDP and export volume are not only larger than Sri Lanka but also larger than Sri Lanka and Pakistan combined. And Bangladesh’s foreign currency reserves are more than twice as large as those of these two South Asian Countries.

The amount of interest paid has increased by 10%. However, Bangladesh has already paid $1.88 billion to development partners in principal and interest. As a result, the loan's principal and interest repayment increased from the previous fiscal year to this one by 10%, totaling $1.71 billion.

However, after the economic crisis in Sri Lanka, there is a lot of talk regarding Bangladesh's foreign debt on several floors. In this regard, Bangladesh always accepts various initiatives in terms of reality do not accept anything with passion.

Bangladesh's reserves and remittances are strong. The Nation’s consistently pay back international loans and interest due as a result of these factors. Bangladesh never failed before, and won't in this situation either and always uses loans from abroad for the correct reasons. Besides paying regular interest and principal, which is primarily why Bangladesh unable to eat with the loan.

Bangladesh was swiftly recovering from the effects of the Covid-19 outbreak as an explanation for why the situation in Sri Lanka did not exist in Bangladesh. Many nations in the world were unable to accomplish that. Bangladesh had 6.94 percent GDP growth in the 2020–21 fiscal years.

In the most recent fiscal year, more than 7.25 percent will be made. More than 35% more has been made via exports. More than 15% more money is being collected in taxes. The private sector's debt flow has risen to more than 12%. Every economic indicator shows that the economy is doing quite well right now.

In contrast to Sri Lanka, Bangladesh has not made any errors. Consequently, there is no issue with international borrowing and has exceptionally cheap interest rates on foreign loans and develop more quickly.

According to World Bank economist, loans and interest payments are rising as export revenues and foreign exchange reserves rise in Bangladesh with regard to foreign interest and actual payments. Remittance influx into the nation is strong.

Bangladesh borrowed money from abroad at cheap interest rates, with lengthy grace periods before repayment. Low-rate foreign loans have always aided Bangladesh's development. The nation might have a chance to repay the loan in the future. Since the country's independence, these have grown.

The results of development projects are positive. One tool for repaying debt is exports and remittances. It's in a respectable position. Earnings from foreign exchange are relatively substantial. The performance of loan repayment is strong due to all of these factors.

The Russia-Ukraine war has now completely altered the global economy after two and a half years of the pandemic. Bangladesh's economy is still in relatively excellent shape even then. This debt is maintaining the upward trajectory of Bangladesh economy. Bangladesh's economy is in excellent shape, presenting a favorable image of the nation to the rest of the globe.

However, Bangladesh has pledged $127 billion in foreign debt in total since its independence. According to the information, of this, $72 billion has been disbursed, while the pipeline has $50 billion. Various development projects have received loans and grants from development partners. Since Bangladesh's independence, the World Bank has disbursed a total of $23 billion to that country.

ADB has since issued $18 billion, while Japan has paid out $16 billion. China issued $4.38 billion at this time. At the same time, the European Union contributed $4 billion, the United States $3.5 billion, Russia $3 billion, Canada and Germany both contributed $2 billion, UNICEF received $1.5 billion, India received $1.47 billion, the Netherlands contributed $1 billion, Denmark contributed $1 billion, Saudi Arabia contributed $1 billion, and Sweden contributed $1 billion.

Bangladesh has been successful in making timely principal and interest payments to the development partners on these loans. As a result, Bangladesh is constantly owed money by development partners.

According to economists, Bangladesh's economy is always expanding and that country's capacity to pay interest is also rising. They claimed that Bangladesh's economy is currently in a very good position and that as a result, the payment of foreign interest has increased significantly. Bangladesh has taken already cautionary measures to not be loan defaulter. Bangladesh has taken 'cost minimization' policy to not face Sri Lanka like crisis.

According to analysts, since gaining independence, Bangladesh has successfully repaid its foreign debt in order to maintain its sterling reputation abroad. The nation has never defaulted on foreign loans due to its careful management of external debt, which has a significantly higher proportion of soft loans with longer maturity terms that was absent in Sri Lanka.

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