Moody’s revises Bangladesh outlook to stable as external pressures ease

Moody’s Ratings has revised Bangladesh’s sovereign outlook to “stable” from “negative,” citing easing political and external pressures, stronger foreign exchange reserves, and record remittances.

The agency kept Bangladesh’s long-term rating at B2, a speculative-grade level associated with high credit risk. Moody’s projects gross domestic product (GDP) growth of 4.3% this fiscal year and about 4.9% from fiscal 2027-28 onward, while inflation is expected to remain near 9% before easing.

Moody’s said the post-election transition has reduced risks to reform efforts and that Bangladesh is better positioned to absorb external shocks. However, it warned that severe banking-sector weaknesses remain. Restoring commercial banks to required capital levels could require recapitalization equal to about 10% of GDP over several years.

“The absence of a detailed and credible resolution roadmap will weigh on confidence,” Moody’s said.