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Originally Posted by Special 1
I feel that the main problem for banladesh is not going to b growth but the distributon of this growth.
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To add to what Special1 has just said:
...Interesting how we are thinking of all very expansionary policies to increase the growth. BD's govt borrowing is increasing, Investment-borrowing is increasing, consumption is increasing and costs of production is rising. Is Bangladesh Bank really doing its best to counter inflation and control the growth at a sustainable level?
Any increase in the money supply to bring down interest rates and facilitate investment, and we're going to see even more money swilling around pushing up prices, with growing domestic demand as it is for capital and consumer goods. Add to that inflation caused by higher market prices of imports.
With all the growth, inflation is going to go up too and those who will be hit hard by it will the unemployed, and low-income groups of people. Is the government and Central Bank really keeping in view this issue? The political repercussions can be disastrous. Already Hasina uses this issue to criticise all the governments for the spiralling prices and cost of living. (And trust me, even if she comes to power she wont be able to do squat with all that rhetoric to keep prices down). And add to that if our country starts defaulting on their dues... then the economic repercussions will be disastrous. We're currently floating on Remittance and RMG revenue inflows, its really disconcerting that we have not been able to diversify out of these.