Prime Minister Sheikh Hasina directed taking foreign loans against standard benchmark like Bangladesh's present risk-free borrowing to avoid any future problem, officials said after a review meeting Tuesday.
She also asked the authorities concerned to implement an integrated tax and monetary policy aimed at checking domestic inflation fuelled by the global fuel and food prices.
Amid Sri Lanka's economic woes, the prime minister sat with the finance minister for a review of macroeconomic scenario, especially Bangladesh's foreign- debt position, on Tuesday at Ganabhaban.
And the meeting came to the conclusion that Bangladesh would not face any debt-repayment problem even within a decade, top officials present at the meet said.
Finance Minister AHM Mustafa Kamal, Bangladesh Bank Governor Fazle Kabir, Finance Division secretary Abdur Rouf Talukder, National Board of Revenue (NBR) chairman Abu Hena Md. Rahmatul Muneem and Economic Relations Division (ERD) secretary Fatima Yasmin were among others present at the stocktaking meet.
Meeting over, Principal Secretary Dr Ahmed Kaikaus in a briefing said Bangladesh would not face any situation like Sri Lanka's as the country has not taken any bad project rather taken better ones with highly probable returns.
"Since inflation inside the country is a kind of imported one due to the higher food and oil process on the international market, Bangladesh's monetary and fiscal policy will have to be managed properly," Prime Minister Hasina was quoted as saying at the meeting.
"Bangladesh's economic fundamentals are on strong base. The macroeconomic scenario is much better than Sri Lanka and Pakistan's. It is shameful and painful for Bangladesh if anybody compares it with Sri Lanka," said Mr Kaikaus.
Meanwhile, two presentations on 'Offshore tax amnesty' and on 'Review of Bangladesh's macro economy against the backdrop of Sri Lankan economic crisis' were presented before the head of government at the meet at her official residence Ganabhaban, said a release from the PMO.
During the presentations made by the National Board of Revenue (NBR) and the Finance Division, the reasons for the ongoing economic crisis in Sri Lanka and its response were discussed in detail alongside reviewing various indicators of Bangladesh's economy compared to other South Asian nations'.
Principal Secretary Dr Kaikaus said on analysis of all the present macroeconomic data of Bangladesh, the premier expressed her satisfaction.
Taking a cue from the top-level reappraisal of the nation's economic health, he said Bangladesh's foreign debt-to-GDP ratio and loan repayments are still in a comfortable zone, export earnings, remittance inflow and foreign-exchange reserves are on a solid stand.
"Bangladesh has not taken any risky foreign loans. The country has borrowed those loans for implementing the projects which have had a good return. So, Bangladesh will not be in trouble in the future days, too," he added.
Bangladesh's export during July-March period of the current FY2022 had expanded by 33.41 per cent to US$38.60 billion compared to the same period last FY2021.
Remittance in the first three quarters had fallen 17.74 per cent to $15.30 billion compared to the corresponding period, Bangladesh Bank data show.
According to the central bank, the country's foreign reserves had reached US$44.20 billion till Monday.
According to the NBR, tax-revenue income had expanded by 15.28 per cent to Tk1.76 trillion during July-February period of the current fiscal compared to the same period of last FY2021.
Mr Kaikaus said analysing various economic indicators it was observed that there is no risk involved in repaying the foreign debt of Bangladesh in the medium and long terms. "Almost all the indicators indicate that the economy of Bangladesh is relatively stable."
According to the Economic Relations Division (ERD), Bangladesh's foreign debts, including medium-to long-term (MLT) ones and external outstanding loans of the state-owned enterprise (SoEs), had amounted to $60.15 billion at the end of FY2021.
Meanwhile, Bangladesh's total debt-to-GDP (gross domestic product) ratio is 32.4 per cent.
According to the ERD, Bangladesh can borrow 55 per cent of GDP both from the domestic and foreign sources.
The country can take 40 per cent of GDP equivalent of foreign loan from the external lenders, ERD officials said, quoting the standard threshold set by the International Monetary Fund (IMF).
Principal Secretary Mr Kaikaus said: "Bangladesh at this moment is in a comfortable level and it has no problem in repaying the foreign debt within the next decade."
ERD Secretary Fatima Yasmin said most of the foreign loans borrowed by Bangladesh are concessional loans from the multilateral and bilateral development partners. These loans have low risk and a long repayment period.
However, Ms Yasmin said most of Sri Lanka's loans were commercial ones and sovereign bonds, which have to be repaid in shorter period or in five years at high interest rates.
"Sri Lanka's external debt is $35 billion while Bangladesh's is some $50 billion with much lower interest of debt-to-GDP ratio than the South Asian island nation's," she said.
Bangladesh needs to spend some $2.5 billion annually on debt repayments, she added.
She said although the interest rate on Sri Lankan loans is more than 8. 0 per cent, Bangladesh's foreign borrowing rate is some 1.4 per cent on average with a maturity of 30 years.
"Bangladesh does not have high-interest commercial loans and sovereign bonds," the ERD secretary added.
Finance Secretary Abdur Rouf Talukder also gave a comparative analysis of economic fundamentals, saying that four major economies in South Asia are India, Bangladesh, Sri Lanka and Pakistan. "But the size of Bangladesh's GDP is more than that of Pakistan and Sri Lanka combined."
Ahmed Kaikaus said after analysing the country's economic data for three hours the prime minister has become satisfied that of Bangladesh faces no risk in foreign debt-repayment.
"It is far from being like Sri Lanka. She (PM) is not worried at all.
"While we are proud and rejoicing over Bangladesh's achievements in the 50 years of independence, it is ridiculous to compare Bangladesh with Sri Lanka in such a way as to undermine the national achievement," added the official.
Asked about government's plan on oil-price hike on the international market, Mr Kaikaus said they had no plan at this moment to increase the price of oil in the domestic front.
In reply about subsidies in the budget, Finance Secretary Mr Talukdar said the government would not reduce the subsidies. "If we reduce or cut the subsidies, the inflationary pressure could be fuelled."
