ISAS Insights

The Bangladesh economy that expanded during the great recession of 2008-09, seems to be losing its momentum, which is reflected in the turmoil in its stock markets, rising inflation and mounting supply side constraints with regard to energy and infrastructure, among other factors. While the ‘search for yield’ phenomenon owing to real negative interest rate led the irrational exuberance, notably in the stock market, there is a regulatory failure in the economy. Moreover, the actions of the Awami League government’s economic policymakers have been less than adequate in recognising the economy’s existing and implied demand owing to changes in demographic settings, inter alia. The paper discusses these issues at some length and suggests that the government should prioritise the economic agendas rather than the political ones in order to minimise the gap between potential and actual economic output.