Bangladesh economy faces 5 major risks: WEF report  

Bangladesh economy is facing five major risks at the moment, according to Global Risk Report-2024 of Davos based World Economic Forum (WRF).
 
It has identified the risks as high inflation, high fuel price. slow growth in private sector credit impacting investment, rise in government borrowing, dollar crisis impacting imports and setback in achieving SDG targets.  

The report released on Wednesday ahead of the 54th Annual Meeting of the WEF, to be held on 15-19 January in Davod, Switzerland said fuel shortage has become a major risk for Bangladesh economy with the fuel supply crunch disrupting production in industries.
The rising inflation also poses risk to the economy, in addition to other risks that include growth slowdown, rise in wealth and income disparity and increased government debt and unemployment in Bangladesh.

The WEF report revealed general risk factors for the global economy in addition to identifying specific risks for various countries including Bangladesh.

Released several days after the World Bank predicted in its biannual report on Global Economic Prospectus that the global economy will see the lowest growth in 2024 since the coronavirus pandemic passed.

The WEF identified global risk in short term and long term. The 10 main global risks in the short term (2 years) are: misinformation and disinformation; extreme weather events; societal polarization; cyber insecurity and interstate armed conflict.

It also includes lack of economic opportunity; inflation; involuntary migration; economic downturn and pollution.

The Centre for Policy Dialogue (CPD) is the local partner of the WFP and the risks in Bangladesh were assessed by it conducting survey on 71 companies.

As per the WEF report, the authorities are rationing gas supply to factories in Bangladesh due to gas shortae. Export-oriented industries are getting gas, but small and medium enterprises are not getting it as per their demand.

The government cannot ensure gas supply and gas supply remains highly interrupted impacting production. Power tariff hike has also increased the production cost in industries.

Moreover, inflation has become the second risk to businesses in Bangladesh when demand for wage rise grows and peoples purchasing power drops as direct impacts of inflation.

Businesses are facing uncertainty on long term investment due to high inflation which is also hampering balance of trade and opening of LCs, thus hampering competition capacity of exporters.

It said at a time high income inequality exists, purchasing power of low-and middle-income people will not rise giving rise the problem when high-income people would accumulate money and wealth and they do not spend much to increase social inequality.  

The report further said Bangladesh will lag behind in fulfilling the Sustainable Development Goals (SDGs) due to funds crunch. Bangladesh needs to invest USD 400 per capita to achieve the goal but the investment may rise to USD 230 per capital thus jeopardizing the goal.