Dhaka, Feb. 19 -- Terming external debt pressure the biggest challenge for Bangladesh newly elected government, economist Debapriya Bhattacharya on Thursday said the administration must act with prudence to stabilise the economy.

"Even during the interim government's tenure, the burden of foreign loans did not ease. Bangladesh is in a fragile position regarding external debt repayments. There is no scope for populist measures at this moment," Debapriya said at a media briefing titled 'Starting Point of the New Government: An Economic Review' at BRAC Centre Inn in the capital's Mohakhali.

Addressing the BNP-led government, Debapriya said restraint in fiscal management would be crucial. "You may not call it austerity, but discipline is es...