Going forward I see the Bangladesh economy vulnerable to following risks in the near term: Resurgence of inflation because of production and supply chain disruptions caused by political agitation and violence and demand pull caused by large wage increases across most sectors. Slowdown in export growth because of demand weaknesses in the US and Europe as well as lack of concrete progress in addressing compliance issues in garments. Weaker remittances as manpower exports have declined significantly in recent months, reflecting failures in economic diplomacy and continued instability in the Middle East and North Africa. Undesirable fiscal expansion in the run up to the impending political transition as government yields to populist pressure to increase un-targeted subsidies and transfers. Deterioration in the soundness and stability of the financial sector due to failure to address corporate governance weaknesses, particularly freeing it from political capture. Most important of all, peace on the streets as all sides begin to mount their final assault to assert their political power and establish their credibility as a significant political force that those in power can ignore only at their own peril. What do you think?
Posted on: Fri, 02 Aug 2013 10:47:49 +0000
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