The analysts at UCB Asset Management have cautiously dispelled the myth that Bangladesh is the next country to experience an uncontrollable economic collapse. The local asset management claimed Bangladesh is in a much better position to deal with the foreign exchange issue in its most recent research, “Is Bangladesh Mirroring Sri Lanka and Pakistan?.” In 2023, economists predict that Bangladesh will spend about $14.1 billion on its most crucial imports, including petroleum, fertilizer, and the payment of its external debt. The nation should end the year with $22 billion in remittance inflows, a 3% yearly increase.
By stopping unnecessary imports, the government hopes to reduce the trade imbalance by $7.9 billion, which would help keep the currency reserve from falling too much from its present level of over $33 billion in gross or over $25 billion in net as of December 2022.
On the other hand, Pakistan’s and Sri Lanka’s foreign exchange reserves have already decreased to $5.6 and $1.7 billion, respectively. Bangladesh has enough foreign money to cover its import expenses for the next 4.9 months, whereas Pakistan and Sri Lanka’s import coverage currently stands at 1.6 and 1 month, respectively. Food sufficiency, low energy usage per person, some local fertilizer production, and higher export earnings all contribute to Bangladesh’s ability to maintain its lead over its two neighbors.
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