Bangladesh’s political crisis adds to growth risks, says S&P

Bangladesh’s political crisis has further exacerbated downside risks to economic growth, fiscal performance, and external metrics, S&P Global Ratings said.

“The damage to credit metrics may be contained if the socio-political situation normalizes soon,” the company said in a statement today (7 August).

While credit buffers have diminished, S&P said it wouldn’t expect immediate strong pressures on the credit ratings.

S&P in July lowered Bangladesh’s credit ratings to B+ from BB- due to a sustained decline in its foreign exchange reserves.

If disruptions continue, exports would be materially lower than expected, with a more prolonged impact on Bangladesh’s external balance sheet and further diminish the central bank’s reserves, S&P said.