Macro economy falls into slight risk

Professor Mustafizur Rahman
Collected

Bangladesh is out of its comfort zone in macro-economic management. The macro economy has fallen into slight risk. Measures including money depreciation, austerity measures and discouraging imports, signal risks to the economy. An economy gradually falls into risk if its capacity indicators weaken.

Economies of different countries, not only Bangladesh, are currently at risk due to the global circumstances. However, this is temporary. The issue has to be tackled properly so that the risk does not exacerbate. The economic crisis will linger if the risk deepens. As a result, overall development will be hampered.

Alongside tackling economic risks, mid-term reform measures have to be taken up. We must not forget steps for reforms. The size of Bangladesh's GDP is increasing. But Bangladesh ranks near the bottom when it comes to the tax-GDP ratio. Projects are not completed in time, which pushes costs up. And so full benefits of a project are lost and this has a negative impact on the overall economy. There must be a drive to implement development projects in a cost-effective manner. GDP growth is increasing, but assets and income disparity is widening. The gap between the rich and the poor is widening. This has a negative impact on the domestic demands.

At the moment, the government go slow in implementing the comparatively unimportant projects. However, the projects which are at the middle or last stage, should be completed expeditiously. If these projects are halted and implemented later, the costs will go up. So a list of projects has to be made on priority basis and implemented accordingly.

Overall the management of macro economy is now at challenging stage. If the economy or GDP growth slows down due to steps by the government to tackle the challenges, that should be accepted as inevitable in the evolving situation.