Dhaka, June 12 -- A model study forearms the government to face three major risks to Bangladesh's fiscal outlook from macroeconomic volatility, sovereign guarantees extended to state-owned enterprises (SOEs) and disaster-related shocks.

According to risk analytics laid down in the latest budget document, under the macroeconomic category, the main concerns are inflation, exchange rate volatility, and export performance.

The Finance Division analysed these risks using a customised tool called Financial Programming and Policy Model, developed by the International Monetary Fund (IMF).

The model suggests a spike in inflation would lead to reduced government spending capability.

With lower expenditure, the fiscal deficit narrows, improving ...