For the last decade, Bangladesh’s economy has grown at the fastest rate. This country received a lot of praise for not having any economic barriers like Sri Lanka and Pakistan. Everything was going in the correct direction.
Bangladesh economic crisis
The unemployment rate had risen to 5.23 percent. It had even surpassed India in terms of per capita income. The scenario to be considered is what triggered the economic crisis in Bangladesh and impeded its rapid progress all at once. According to some experts, there are several variables contributing to the growing economic disaster; nevertheless, the most significant contributing element is the abrupt increase in gasoline prices of up to 52%, which has had a devastating impact on the industrial sector. It began with Covid-19 and the Russia-Ukraine war, which disrupted global supply lines and caused food and fuel prices to rise in the country. It also resulted in the country’s foreign exchange reserves depleting and lengthy power disruptions. Bangladesh could not escape the consequences of the global economic downturn and soaring prices. It is the third country in South Asia, after Sri Lanka and Pakistan, to suffer the brunt of the region’s economic troubles. However, Bangladesh’s economic crisis situation is not as bad as that of Sri Lanka.
Economics Money crisis
It is obvious that thermal sources account for 93% of the country’s power generation. Natural gas accounts for around 63% of total electrical generation. While diesel accounts for 10%, coal accounts for 5%, heavy oil accounts for 3%, and renewable resources account for the rest.
It is obvious that thermal sources account for 93% of the country’s power generation. Natural gas accounts for around 63% of total electrical generation. While diesel accounts for 10%, coal accounts for 5%, heavy oil accounts for 3%, and renewable resources account for the rest.
For example, the high cost of infrastructure projects, such as the Padma Bridge, one of the country’s greatest projects, cost roughly $3.6 billion, which was initially anticipated to be $1.16 billion in 2007.
Bangladesh’s Rooppur Nuclear Power Plant costs $12.65 billion; however, the exact cost of this project will not be known until it is completely operating. Similarly, the Dhaka City Metro Rail Project cost $3.3 billion, despite initial predictions of $2.1 billion. Another cause of the Bangladesh economic crisis is the collapse of the banking sector as a result of unending loan defaults. The central bank indicated that the entire amount of defaulted loans was $11.11 billion, but the IMF claims that the actual number is more than double that. Similarly,
corruption in the power sector has played a significant role in precipitating this economic crisis. The Power Development Board received $7.1 billion between 2010 and 2021, while Bangladesh Petroleum Corporation earned $3 billion between 2010 and 2015. Regrettably, these enormous sums were not entirely spent on power generation.
Similarly, capital flight out of the country contributed to the catastrophe. According to the Global Finance Integrity Report, an estimated $8.27 billion was illegally laundered to Swiss banks between 2009 and 2018 by mis-invoicing the values of imports and exports. It has expanded by 55.1% to 871 million by 2022. Economists believe that the Bangladeshi Taka has fallen by around 20% against the US dollar in the last three months.
Furthermore, as a result of the Russia-Ukraine conflict, imports increased by 39% while exports only increased by 34% during the fiscal year that concluded on June 30. Similarly, remittances from overseas Bangladeshis plummeted to 5% in July of this year. Numerous austerity measures are currently being implemented to relieve economic concerns. According to Cabinet Secretary Khandker Anwarul Islam, most schools in Bangladesh are closed on Fridays but will now be closed on Saturdays to minimize energy usage amid concerns about rising fuel prices. Government workplaces will reduce their workdays from eight to seven hours, but private offices will be permitted to create their own schedules. The new hours will go into effect on Tuesday.
