Shadow over credit rating

Bangladesh's present score according to international rating agency Moody's is a stable Ba3. That may change unless the political stalemate and resulting violence are redressed soon enough. As stated by Moody's recently, the ongoing turbulence is negatively impacting exports, investment and economic growth. Unless this trend is reversed, Bangladesh stands to lose its rating, which will not help in attracting foreign investment to the country. Today's political reality as opposing factions battle it out in the capital and beyond is that it has marked a departure from previous cycles of political violence that usually surrounded a general election in the country. It is “unusual” in terms of the fact the economy has not suffered such a prolonged battering before.

As pointed out by economists, there is real possibility that the country may not be able to attain projected growth rates as the annual development plan is not being fully implemented due to ongoing unrest. Again, as pointed out by Moody's, exports grew a mere 2.1 per cent over the first seven months of the current fiscal compared to 15.1 per cent for the same period of the previous year. Indeed, it is bad news for most sectors across the economy. The transportation sector, for instance, has been severely affected due to the blockade of Dhaka and arson attacks in various districts. The garments sector today has been forced to shift to air cargo to meet buyer deadlines, which has sent shipment costs through the roof. Things unfortunately will not improve unless there is a general lowering of political mercury.