Bangladesh's total debt burden is currently far below the threshold level on both domestic fronts posing no threat to the economy, according to an official document. For Bangladesh  the comfortable level for total public debt is 70 per cent of GDP and external debt is 55 per cent of GDP. The country's projected total debt (42.9 per cent of GDP) and external debt (16.4 per cent of GDP) by fiscal 2023-24 is far below the respective thresholds and do not pose any threat despite having a slight upward trend due the COVID-19 shock, according to the recent document. Also read: No Chinese debt trap in Bangladesh: Chinese envoy It said that prudent fiscal policy adopted by the government is expected to keep the public debt at a sustainable level over the medium term. The country's debt sustainability analysis (DSA) by the World Bank-IMF shows that government debt remains at a low risk of debt stress despite the economic shock caused by the COVID-19 pandemic (IMF article IV report 2020). External and domestic debt indicators are below their respective thresholds under the baseline and stress test scenarios until 2030. The document said that composite index (CI) rating that is calculated by the above framework based on the country's real GDP growth, remittances, international reserves, world growth, and CPIA (Country Policy and Institutional Assessment) score is calculated 3.06 that suggest a strong debt carrying capacity. The official document stated that Bangladesh has a solid and strong track record in debt service payments and the country's external debt stock is still reasonably low. Projected external debt stock stands at 53.5 billion USD at the end of FY21, which is 14.7 per cent of the projected GDP. The country's external debt service liability that includes amortisation of long term external debt and interest payments stands at 2.1 billion USD in FY21, which is 5.7 per cent of the projected export earnings and 3.6 percent of the projected revenue earnings in FY21. The World Bank-IMF joint Debt Sustainability Analysis (DA) in 2019 assessed the threshold level of external debt service liability for Bangladesh is 21 per cent of its export and 23 per cent of government revenue. This indicates that Bangladesh's external debt lies far below the danger level and the government has adequate repayment capability. “However, the government should remain vigilant against any external development including exchange rate risk,” the document mentioned. It said that the government usually provides guarantees/counter guarantees against loans incurred by the state-owned enterprises in line with government's priority sectors, such as power, energy,national aircraft carrier (i.e Biman Bangladesh Airlines Itd), and agriculture etc. These liabilities would come into effect only if the concerned enterprise fails to pay back the loan. Also read: High value public debt spent on nonproductive sector causes imbalance in economy: CPD As of May 2021, the face value of government guarantees/ counter guarantees stands at Tk. 1,066.6 billion and the outstanding amount of loan against those Guarantees is Tk. 738.4 billion, which is 2.1 percent of the projected GDP and 12.2 percent of the government expenditure in FY22. Power and Energy sector alone accounts for 58.5 per cent of the outstanding contingent liabilities followed by Bangladesh Biman and Agriculture sector as 14.8 per cent and 6.7 per cent respectively. Having such extent of contingent liabilities, the government has devised necessary monitoring system under a risk framework so that these guarantees do not turn into government liabilities. “Rigorous monitoring and sovereign guarantee/counter guarantee guidelines issued by the government are expected to keep the contingent liabilities in control.” The document stated that Implementation of the declared economic recovery program, providing adequate investment in the health sector including mass vaccination program, and implementation of expansionary monetary policy pursued by Bangladesh Bank would help for a sustainable economic recovery as the government has projected 7.2 per cent GDP growth in FY22. At the same time, projected overall implicit interest rate that is calculated from the projected debt stock and interest payments is 5.3. Favourable debt dynamics on the back of higher GDP growth compared to lower interest cost implied that projected government finance would not accumulate the public debt (Debt:GDP). Slight upward trend in the debt-GDP ratio due to the winding fiscal deficit during the economic recovery period will not be a cause for concern as the revenue collection will boost in the medium term when the economy get back to its normal level.

Fumio Kishida, the man soon to become Japan’s prime minister, says he believes raising incomes is the only way to get the world’s third-largest economy growing again. Nearly a decade after long-serving Prime Minister Shinzo Abe vowed to “make Japan great again,” Japan is in a holding pattern, stalled both by the pandemic and by chronic problems such as an aging and shrinking population, growing inequality and stagnant incomes. Topping Kishida’s to-do list is another big dose of government spending to help Japan recover from the COVID-19 shock. Kishida says he wants to promote a “new capitalism” that would be more equitable, with fairer distribution of national wealth — the only way to get frugal Japanese families to spend more. Read: Japan ex-diplomat Kishida wins party vote, to become new PM “Unless the fruits of growth are properly distributed, a ‘virtuous cycle of growth and distribution’ cannot be realized,” he told reporters after he overwhelmingly was elected leader of the ruling Liberal Democratic Party on Wednesday. “I would like to take economic measures to raise the incomes of many of you.” Despite his ambitious talk, Kishida is viewed as an establishment choice, not a reformer. He's a former banker and solid member of the political elite: his father and grandfather also were politicians. Analysts say Kishida, who is all-but-certain to be elected prime minister by Parliament on Monday, is unlikely to stray far from Abe's playbook of heavy doses of stimulus. Neither did the current prime minister, Yoshihide Suga, who is stepping aside after one year in office. Kishida's top priority? “The economy," he told national broadcaster NHK. He said he plans to propose a spending package worth several hundred billion dollars soon. His support for housing and education subsidies should boost consumer spending, said Naoya Oshikubo, senior economist at SuMi TRUST. He expects a “tailwind for the stock market, as it will make clear that ex-Prime Minister Abe’s economic policies will continue." Under Kishida, the Bank of Japan is likely to stick to its years-long efforts to spur growth by keeping interest rates near zero — making borrowing cheap — by pouring trillions of yen (hundreds of billions of dollars) into the economy through asset purchases. The benchmark Nikkei 225 index fell 0.4% in morning trading Thursday after data showed factory output and retail sales weakened in August as the country buckled down to fight the pandemic. Share prices are near their highest levels in three decades, but that wealth is not trickling down to average Japanese. Their incomes adjusted for inflation have been falling. Meanwhile, jobs are growing less secure as companies increasingly rely on part-time and contract workers to keep costs low — the average minimum wage in Japan is only 930 yen ($8.30), while the cost of living is higher than in many Western countries. Read: Japan’s ex-top diplomat Kishida to become new PM The number of families relying on Japan’s meager welfare benefits surged during the pandemic, and poverty has increased, especially in families headed by single mothers. What was labeled the “lost generation” during Japan’s long years of stagnation has become an “underclass” accounting for about four in 10 Japanese, says Waseda University professor Kenji Hashimoto. He and other experts believe the post-World War II formula that made Japan an industrial powerhouse is outdated. A soft-spoken pragmatist, Kishida has not spelled out in detail his vision for “new capitalism" and it's unclear if he has an overarching strategy for tackling the longer term problems that are constraining growth. That means other party leaders, the central bank and the bureaucracy may have greater sway and could stymie big changes such as labor reforms that economists say are hindering improvements in productivity. With nearly a third of the population already 65 or older, costs for health care and pensions are soaring, and ordinary families are footing a growing share of the bill. Kishida says the sales tax, now at 10%, should not be raised for about a decade to avoid snuffing out a revival in demand. Corporations are holding a growing share of wealth, hoarding their earnings and paying lower taxes: As of June 30, 2020, retained corporate earnings in Japan totaled nearly 460 trillion yen (about $4.2 trillion) Poverty is generally hidden away in affluent, orderly Japan, and homelessness is not as prevalent or visible as it is in the U.S. and some other countries. But living standards are falling and will keep declining unless the value of work per person rises as the population declines. Raising productivity also is key to raising wages economists say. Despite the famous efficiency of manufacturers like Toyota Motor Corp., Japan ranks 21st among the 36 nations in the Organization for Economic Cooperation and Development. Its per-hour productivity was under $50 in 2018, compared with nearly $75 per hour in the U.S. and about $102 in Ireland. Read: Japan's PM Suga steps down Kishida has said little about the productivity problem, though he is getting a head start on one area of reforms: what the Japanese call “digitization." The slow and clumsy handling of pandemic relief payments and vaccinations drove home the urgency of modernizing Japan’s data sharing and public services. A new Digital Agency was launched on Sept. 1 to lead a shift away from reliance on fax machines, handwritten documents and ink stamps, helping streamline red tape. Such changes are necessary but won't fix the economy, Richard Katz, editor-in-chief of The Oriental Economist, said in a recent online briefing. “There are a whole bunch of challenges," he said. “They're solvable but that needs a prime minister with a will to act, who has a strategy."

Prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year. According to new estimates from the WTO, the volume of world merchandise trade is expected to increase by 8.0 percent in 2021 after having fallen 5.3 percent in 2020, continuing its rebound from the pandemic-induced collapse that bottomed out in the second quarter of last year. Trade growth should then slow to 4.0 percent in 2022, and the effects of the pandemic will continue to be felt as this pace of expansion would still leave trade below its pre-pandemic trend. The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries. COVID-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine any hoped-for recovery. "The strong rebound in global trade since the middle of last year has helped soften the blow of the pandemic for people, businesses, and economies," WTO Director-General Ngozi Okonjo-Iweala said. Also read: Okonjo-Iweala becomes first woman, African to lead WTO "Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need." "Ramping up production of vaccines will allow businesses and schools to reopen more quickly and help economies get back on their feet. But as long as large numbers of people and countries are excluded from sufficient vaccine access, it will stifle growth, and risk reversing the health and economic recovery worldwide," she said. The Director-General added that trade through value chains has helped countries access food and essential medical supplies during the crisis. "Manufacturing vaccines requires inputs from many different countries. One leading COVID-19 vaccine includes 280 components sourced from 19 different countries," she said. "Trade restrictions make it harder to ramp up production. The WTO has helped keep trade flowing during the crisis. Now, the international community must leverage the power of trade to expand access to life-saving vaccines." Short-term risks to the forecast are firmly on the downside and centred on pandemic-related factors. These include insufficient production and distribution of vaccines, or the emergence of new, vaccine-resistant strains of COVID-19. Over the medium-to-long term, public debt and deficits could also weigh on economic growth and trade, particularly in highly indebted developing countries. Also read: WTO, WHO chiefs for opening trade to ensure vital medical supplies The forecast illustrates two alternative scenarios for trade. In the upside scenario, vaccine production and dissemination would accelerate, allowing containment measures to be relaxed sooner. This would be expected to add about 1 percentage point to world GDP growth and about 2.5 percentage points to world merchandise trade volume growth in 2021. Trade would return to its pre-pandemic trend by the fourth quarter of 2021. In the downside scenario, vaccine production does not keep up with demand and/or new variants of the virus emerge against which vaccines are less effective. Such an outcome could shave 1 percentage point off of global GDP growth in 2021 and lower trade growth by nearly 2 percentage points. For the whole of 2020, merchandise trade was down 5.3 percent. This drop is smaller than the 9.2 percent decline foreseen in the WTO's previous forecast in October 2020. The better than expected performance towards the end of the year can partly be explained by the announcement of new COVID-19 vaccines in November, which contributed to improved business and consumer confidence. The volume of world merchandise trade plunged 15.0 percent year-on-year in the second quarter of 2020 (revised up from -17.3 percent in October) as countries around the world imposed lockdowns and travel restrictions to limit the spread of COVID-19. Lockdowns were eased in the second half of the year as infection rates came down, allowing goods shipments to surge back to near 2019 levels by the fourth quarter. The impact of the pandemic on merchandise trade volumes differed across regions in 2020, with most regions recording large declines in both exports and imports. Asia was the sole exception, with export volumes up 0.3 percent and import volumes down a modest 1.3 percent. Regions rich in natural resources saw the largest declines in imports, including Africa (-8.8 percent), South America (-9.3 percent) and the Middle East (-11.3 percent), probably due to reduced export revenues as oil prices fell around 35 percent. In comparison to other regions, the decline in North American imports was relatively small (-6.1 percent). Also read: WTO, WCO chiefs pledge joint efforts to facilitate trade in essential goods In 2021, demand for traded goods will be driven by North America (11.4 percent) thanks to large fiscal injections in the United States, which should also stimulate other economies through the trade channel. Europe and South America will both see import growth of around 8 percent, while other regions will register smaller increases. Much of global import demand will be met by Asia, exports from which are expected to grow by 8.4 percent in 2021. European exports will increase nearly as much (8.3 percent), while shipments from North America will see a smaller rise (7.7 percent). Strong forecasts for export growth in Africa (8.1 percent) and the Middle East (12.4 percent) depend on travel expenditures picking up over the course of the year, which would strengthen demand for oil. Meanwhile, South America will see weaker export growth (3.2 percent), as will the Commonwealth of Independent States (CIS), including certain former and associate Members (4.4 percent).