The world’s leading financial magazine Nikkei Asia sees Bangladesh as an exception in the current economic situation in South Asia. In its recent report titled “Beyond Sri Lanka, economic cyclone bears down on South Asia”, Nikkei has detailed the economic pictures of Sri Lanka, Pakistan, India, Nepal, Maldives and Bangladesh.
The report says that Bangladesh is an exception in the financial crisis soaring through South Asia which will result in inflation, higher interest rates and currencies depreciation.
Nikkei reveals that Bangladesh has successfully kept the forex reserves and external debt at more sustainable levels because of its tough decisions. The report also pointed out that Bangladesh has maintained a steady tax revenue as the country did not enforce a tougher lockdown during the first two waves of the COVID19 pandemic.
It has also refrained from intervening extensively in the open market to prop up its currency, saving funds for a rainy day while carefully managing its fiscal deficit and current account balance.
The report revealed that much of South Asia is to face similar risks from shrinking forex coffers and surging global inflation.
The Maldives is highly vulnerable to external and macroeconomic shocks, and its debt to GDP ratio exceeds 100%.
Sri Lanka is facing the worst economic crisis since its independence because of its lax fiscal discipline, lack of foresight and unplanned mega-development projects. Pakistan is also on the path of Sri Lanka as its debt to GDP ratio was 35% in January and faces an unstable political situation similar to the island country of the Indian Ocean. India, the sixth largest economy in the world, is also not immune to inflation.
The retail prices rose nearly 7.8% in April 2022.
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