Standard & Poor's, a leading rating agency in the world, has affirmed Bangladesh's sovereign credit rating with a stable outlook, which would give a much-needed boost to the country's under-pressure economy.

The US-based financial services company gave Bangladesh a‘‘BB-”, thanks to its strong growth prospects, adequate external liquidity and substantial donor commitment to improve its debt ratios, according to its latest update as of January 13.

Bangladesh received the same rating and outlook from the firm in 2011 and 2010.

The rating came a few days after another international rating agency, Moody's Investors Service, reassessed Bangladesh and left its rating unchanged at “Ba3”, which the central bank believes would help the country float its first ever sovereign bonds.

The outlook reflects an unchanged rating based on their quarterly desk review of the economy, sad Hassan Zaman, senior economic adviser to the governor of BB.

The rating agencies will visit Bangladesh for a more in-depth assessment of macroeconomic developments in April-May this year and will review the rating at that stage, he told The Daily Star.

Both ratings are expected to give Finance Minister AMA Muhith "asighofrelief, who onlyTuesday said ablackshadowcame over the economy due to uncertain trends on the global economic front.

In its report in November last year, Standard and Poor's said Bangladesh's limited fiscal flexibility due to a low revenue-generation capacity against, relatively high public and external debt and significant physical and human capital development needs constrain the sovereign ratings.

"Strong and stable economic growth and ongoing substantial donor engagement, which support continued improvements in debt ratios, underpin the ratings. Adequate central bank reserve coverage is another supporting factor for the ratings," it said.

Sovereign credit rating is an important tool to position a country in the global financial arena by providing information on the overall economic situation.

Standard and Poor's said the stable outlook reflects Bangladesh's strong growth prospects and ongoing donor support, which ensures low-cost and long maturity external debt that minimises refinancing risk. These factors are balanced against emerging balance of payments (BoP) pressures as remittance growth slows and imports expand, and the risks from rising inflation and a weakened banking sector.

"We could raise the ratings if the government persists with measures to expand the revenue base and improve administrative and collection efficiency, leading to a material rise in its revenue. We could also upgrade Bangladesh if rising investment leads to a sustainable increase in real GDP growth."

"Conversely, we could downgrade the sovereign if fiscal slippages result in rising public debt and external donor support declines materially. We could also lower the ratings if incipient BoP pressures accentuate and lead to an erosion of external liquidity through lack of appropriate policy responses," said Standard and Poor's.