India, Bangladesh unlikely to cut subsidy bill as elections near: Moody's

Average fiscal deficit to be 4% of GDP in 2023, says agency's Sovereigns--Asia-Pacific report

Bangladesh and India will have less impetus to reduce support for food and fuel subsidies as elections approach in 2023 and early 2024, according to rating agency Moody’s.

Elevated commodities prices will keep spending on food and fuel subsidies or other measures high. Social strains will keep deficits wider than before the pandemic. Social, political and economic pressures will delay fiscal tightening in several countries, it said.

“We expect the average fiscal deficit to be around 4% of GDP in 2023 compared with 1.9% in 2019”, Moody's said in “Sovereigns--Asia-Pacific: 2023 outlook stable on debt sustainability but social risks will