Fitch affirms Bangladesh’s issuer default rating at ‘BB-’, outlook stable | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Friday
July 11, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
FRIDAY, JULY 11, 2025
Fitch affirms Bangladesh’s issuer default rating at ‘BB-’, outlook stable

Economy

TBS Report
30 September, 2022, 10:45 pm
Last modified: 30 September, 2022, 11:52 pm

Related News

  • Exporters to receive same cash incentives as last FY
  • BB raises startup fund limit, drops upper age barrier
  • Can Bangladesh’s weiji moment trigger the next phase of growth? StanChart asks
  • Foreign currency in offshore banking units now eligible as collateral for taka loans
  • What it will take to merge crisis-hit Islamic banks

Fitch affirms Bangladesh’s issuer default rating at ‘BB-’, outlook stable

The stable outlook reflects the move to greater exchange-rate flexibility

TBS Report
30 September, 2022, 10:45 pm
Last modified: 30 September, 2022, 11:52 pm
The Fitch Ratings logo at their offices at Canary Wharf financial district in London,Britain on 3 March 2016. File Photo: REUTERS/Reinhard Krause
The Fitch Ratings logo at their offices at Canary Wharf financial district in London,Britain on 3 March 2016. File Photo: REUTERS/Reinhard Krause

The rating agency Fitch Ratings on Thursday affirmed Bangladesh's Long-Term Foreign-Currency Issuer Default Rating (IDR) at "BB–" with a stable outlook.

The rating reflects Bangladesh's strong growth prospects, government debt that is below the "BB" median, and a manageable external debt repayment profile.

This is balanced by low government revenue, low per capita income, a weak banking sector, and deficient governance indicators, Fitch said in a statement.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The stable outlook reflects the move to greater exchange-rate flexibility.

Also, the prospect of continued support from external official creditors will help Bangladesh navigate a challenging external environment posed by the Ukraine war and rising global interest rates.

While the growth prospects of Bangladesh's economy are strong, its economic activity is expected to slow to 5% in the current fiscal 2022-23, given the temporary measures to contain imports and curb electricity consumption.

However, growth should pick up to 6.4% in 2024 as these measures are eased along with a fall in commodity prices. The recovery from the Covid-19 pandemic has continued, with Gross Domestic Product (GDP) expanding by 7.3% in FY22.

Growth has been broad-based; supported by private consumption with the aid of remittances, government spending, investment, and a surge in ready-made garment exports of 35% Year-on-Year (YoY) basis, it added.

Referring to the external interface of the economy, Fitch said the pressure on the country's international reserves has reduced.

Its foreign-exchange reserves fell by 16% to $38.9 billion in eight months of 2022 amid surging imports and foreign-currency intervention by the central bank.

But, the pressure on reserves should ease following policy measures to curb imports, a hike in administered fuel prices of nearly 50%, and greater exchange-rate flexibility.

Fitch said the current-account deficit is expected to narrow to 3% of GDP in 2023 and 2.3% in 2024, from 4% in 2022. The foreign exchange reserves will average at $34 billion, or 4.7 months of current external payments, in 2023-2024.

There are, however, downside risks to our forecasts from a renewed surge in global fuel and food costs stemming from the Russia-Ukraine war.

The forex reserve buffer is adequate relative to external financing needs, including external debt repayments, but limited transparency in reserve management could increase uncertainty and hurt the credibility of the policy framework.

The actual level of available liquid FX reserves could be lower than gross figures suggest since a portion is allocated to the Export Development Fund and Bangladesh Investment Development Fund, it added.

Low government revenue

The general government revenue/GDP ratio, at 9.8% in FY22, is a key credit weakness and much below the 27.3% 'BB' median, Fitch said.

It added that the already low revenue base could be further undermined by measures contained in the FY23 budget, including a corporate tax cut without offsetting measures. The budget targets a deficit of 5.5% of GDP.

The deficit could undershoot the government's target, as has occurred in the past, but our FY23 economic growth forecast trails the government's 7.5%, meaning that the budget deficit is likely to slightly exceed the government's target.

Weak banking-sector governance

Fitch said they regard the health of Bangladesh's banking sector and governance standards as weak, especially among public-sector banks.

Official data reveals that the system's gross non-performing loan (NPL) ratio reached 8.5% by the end March 2022, from 7.9% at end-2021, it mentioned, adding that the NPL ratio of state-owned commercial banks, at 20.0%, is substantially higher than the 5.8% of private-sector banks, but the ratios could rise further once forbearance measures are withdrawn.

Bank capitalisation is thin relative to prevailing market risks and we believe the banking sector could be a source of contingent liability for the sovereign if credit stress intensifies.

The system's capital adequacy ratio (CAR) stood at 11.4% as of March 2022, against 11.08% at end-2021, while the CAR of state-owned banks was 6.8%, up from 3.7%, Fitch said.

Bangladesh / Top News

Fitch Ratings Inc / Bangladesh Bank

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Bangladesh's delegation, led by Commerce Adviser Sk Bashir Uddin, began high-level negotiations with USTR Ambassador Jamieson Greer at 9pm Bangladesh time on Thursday (10 July). Photo: Collected from the Facebook handle of Golam Mortoza, Press Minister at the Bangladesh Embassy in the US
    No need to worry as US tariff talks ongoing: Fouzul tells biz leaders
  • Commerce Adviser Sk Bashir Uddin met USTR Ambassador Jamieson Greer at the USTR office in Washington, DC on 10 July 2025. Photo: CA Press Wing
    35% tariff: Commerce adviser meets US trade representative in Washington
  • Economist Abul Barkat; Photo: Courtesy
    Economist Abul Barkat arrested in graft case

MOST VIEWED

  • Graphics: TBS
    BB raises startup fund limit, drops upper age barrier
  • Workers pack undergarments at the packing section of a garment factory in Ashulia, on the outskirts of Dhaka, Bangladesh, April 19, 2025. Photo: REUTERS/Fatima Tuj Johora
    After US tariffs, jobs hang by a thread in Bangladesh's garments sector
  • Photo: Mohammad Minhaj Uddin/TBS
    SSC, equivalent results: Pass rate drops to 68.45%, GPA-5 also declines
  • File photo of containers at Chattogram port/TBS
    US buyers push Bangladeshi exporters to share extra tariff costs
  • Govt vehicle purchase, foreign trip, new building construction banned: Finance ministry
    Govt vehicle purchase, foreign trip, new building construction banned: Finance ministry
  • Students sit for SSC exam at Motijheel Girls' High School on 10 April 2025. Photo: Mehedi Hasan/TBS
    SSC exam results out: Here's how you can check online and via SMS

Related News

  • Exporters to receive same cash incentives as last FY
  • BB raises startup fund limit, drops upper age barrier
  • Can Bangladesh’s weiji moment trigger the next phase of growth? StanChart asks
  • Foreign currency in offshore banking units now eligible as collateral for taka loans
  • What it will take to merge crisis-hit Islamic banks

Features

Photo: Collected/BBC

What Hitler’s tariff policy misfire can teach the modern world

10h | The Big Picture
Illustration: TBS

Behind closed doors: Why women in Bangladesh stay in abusive marriages

13h | Panorama
Purbachl’s 144-acre Sal forest is an essential part of the area’s biodiversity. Within it, 128 species of plants and 74 species of animals — many of them endangered — have been identified. Photo: Syed Zakir Hossain/TBS

A forest saved: Inside the restoration of Purbachal's last Sal grove

14h | Panorama
Photo: Rajib Dhar/TBS

11 July 2024: Riot vehicles, water cannons hit the streets as police crack down on protesters

6h | Panorama

More Videos from TBS

'Hypocrisy' will not continue, Iran tells IAEA

'Hypocrisy' will not continue, Iran tells IAEA

9h | TBS World
OpenAI to release web browser in challenge to Google Chrome

OpenAI to release web browser in challenge to Google Chrome

9h | TBS World
Will the title 'Honorable and Excellency' be abolished?

Will the title 'Honorable and Excellency' be abolished?

10h | TBS Today
July Declaration must be constitutionally recognized: Akhtar Hossain

July Declaration must be constitutionally recognized: Akhtar Hossain

9h | TBS Today
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net