Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue (CPD), has underscored three critical challenges confronting Bangladesh: persistent inflation, a burgeoning debt burden, and sluggish economic growth. 

Speaking at a dialogue titled ‘New Government, National Budget and Citizens’ Aspirations’ at Lakeshore Hotel in the capital, Bhattacharya shed light on the pressing issues affecting the nation’s socio-economic landscape.

Addressing the audience, Bhattacharya emphasized the adverse impact of unabated inflation on low-income and marginalized segments of society, lamenting that it has exacerbated their financial struggles and hindered their access to essential commodities such as food and healthcare services.

He expressed concerns over Bangladesh’s increasing reliance on borrowing for debt servicing, which has escalated the debt risk. Bhattacharya noted that the country’s debt-to-GDP ratio currently stands at 42%, considering both public and private sector debt. He cautioned against the disproportionate reliance on domestic borrowing, highlighting the need for a balanced approach to debt management.

Despite Bangladesh’s track record of timely debt payments, Bhattacharya raised alarms regarding the outstanding debt, particularly in the energy sector, amounting to approximately $5 billion. This underscores the importance of addressing debt management challenges to mitigate financial risks effectively.

Bhattacharya highlighted the adverse implications of slow economic growth on the government’s fiscal space for expenditure. 

As economic growth stagnates, the government’s capacity to allocate resources for essential sectors and developmental initiatives diminishes, posing additional hurdles to socio-economic progress.