Analysts say high inequality creates social instability. The workers’ agitation has intensified demanding salary increase. Many analysts believe that high inequality levels hinder economic growth.
The global risk report further said that Bangladesh will lag behind in meeting the Sustainable Development Goals (SDGs) due to lack of funds. To meet the SDGs by 2030, Bangladesh needs to invest US$400 per capita, but WEF predicts that investment could increase to US$230 per capita during this period.
The increase in government debt as well as unemployment is the first risk to the economy. According to the WEF report, increased government debt slows credit flows to the private sector, hindering investment. Businessmen have been vocal against this in the past also. Increase in government debt also increases bank lending rates.
CPD’s Golam Moazzam said that when the pace of implementation of a government project slows down and the budget of the government project is revised, the returns from that certain project reduce. Again, an increase in government debt could lead to some degree of instability in the macro economy and investors do not want that, he said.
Previously, businesses had identified five main risks to Bangladesh’s economy. They were: hyperinflation, debt crisis, impact of high prices, man-made environmental damage and geopolitical competition over resources.
