Bangladesh's Economic Crisis

Is Bangladesh going  Sri Lanka's Way ?

Bangladesh a fast growing economy was in news in recent past for its improvement in economic growth of around 6.94% in fiscal year 2021-22. A country whose Poverty reduction model was praised by the World Bank stating that countries can learn from Bangladesh's model. Even some economists believed that Bangladesh will be a developed economy by 2041 because of its stable economic momentum. Recent news headlines stated that India falls behind Bangladesh in per capita income by $280. In the year 2020 Bangladesh's economy grew by 3.4%. Bangladesh also moved up two notches to 133rd in HDI rank. Many news articles even praised Bangladesh for its improvement in reducing gender gaps.

All these are the indicators of good economic growth of a country.

But the question is  how did they get here? How did the country get to a crisis situation in a year? Following are the reason that is leading Bangladesh towards an economic crisis.

• Corruption, Scams, mismanagement of data worsened the country' situation.
• Russia's invasion of Ukraine caused food security threat and food and energy crisis in Bangladesh.
• Rising import bill widening trade deficit, sky rocketing inflation rates around 7.5% and hike in fuel prices by 52% which is very high in the history.
• The country is known for its garment imports but the garment industry has been hit hard because of recession in Europe.
• Shrinking Foreign Reserves from $45 billions in 2021 to $39 billions in 2022, the country became third after Pakistan and Sri Lanka seeking loan from IMF.

However, IMF says that with a debt to GDP ratio of 39%, Bangladesh is not in a crisis like situation but is vulnerable to the uncertain global economic ups and downs