Bangladesh ranks 9th strongest economy in the wake of COVID-19 outbreak: The Economist

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The true drivers of Bangladesh economy, female workers and apparel sector. Representative Photo.

Enamul Hafiz Latifee reports,

The Economist, the leading source of analysis on international business and world affairs, has ranked Bangladesh as the 9th strongest economy in its report titled “Which emerging markets are in most financial peril?” that is on the financial strength of 66 emerging economies in the wake of the COVID-19 attack.

The ranking examines the vulnerability of selected economies across four potential sources of peril: public debt as a percentage of GDP, foreign debt (both public and private), cost of borrowing, and reserve cover.

 

According to the ranking, released yesterday, 02 May 2020, the economy of Bangladesh has featured as strong or relatively strong in all the said indicators. It is ahead of China, India, Vietnam, Malaysia, UAE, Mexico, Brazil and other South Asian countries in the ranking.

Botswana tops the list of countries with the strength of its indicators while Venezuela fared as most vulnerable with the 66th and last position.

 

It said COVID-19 hurts emerging economies in at least three ways: by locking down their populations, damaging their export earnings and deterring foreign capital.

“Even if the pandemic fades in the second half of the year, GDP in developing countries, measured at purchasing-power parity, will be 6.6% smaller in 2020 than the IMF had forecast in October,” it added.

The report said, “Over the course of 2020, the 66 economies in our exercise will have to find over $4trn to service their foreign debt and cover any current-account deficits.

 

Excluding China, the figure is US$ 2.9 trillion. But this leaves out the buyers that emerging economies have accumulated.”

It said the grubbiest garments are found elsewhere-among the world’s emerging markets.

They collectively owe US$ 17 trillion of government debt, 24% of the global total.

Eighteen of them have had their credit ratings cut in 2020 so far by Fitch, more than in the whole of any previous year.

 

Argentina has missed a US$ 500 million payment on its foreign bonds. If it cannot persuade creditors to swap their securities for less generous ones by 22 May 2020, it will be in default for the ninth time in its history, according to the Economist.

 

To weather the crisis, the report said emerging economies may need at least US$ 2.5 trillion, the fund reckons, from foreign sources or their own reserves. One way to ensure countries have more hard currency is to stop taking it from them.

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