Both country's forecast is in dollar,so it doesn't matter whether BD has more inflation or not.And who tell you that BD will alyways have more inflation than India? In just two yeras ago India had much more inflation than BD,when Rupee depreciated from 45 per dollar to 60 per usd.
Depreciation of currency has little to do with inflation...there can be a correlation but it heavily depends on the particular scenario being talked about. One can happen without the other....sometimes both happens....sometimes they happen in opposite directions. The situation is complicated.
All Real GDP is doing is gauging the effective strength of an economic output instead of what is written on paper (Nominal)
Lets say India GDP was 100 US dollars in year 2000 and the same year Bangladesh was 10 dollars.
The next year India GDP goes to 110 US dollars and Bangladesh goes to 11 dollars (exact same nominal growth of 10%).
But during this year prices of goods and services in India increased by 5% and Bangladesh by 10%. Lets say no depreciation or appreciation happens anywhere w.r.t US dollar since we are highlighting the role of inflation only.
That effectively means in year 2001, we have 110 divided by 1.05 = 104.8 dollars of production compared to before for India.
For Bangladesh in 2001, we have 11 divided by 1.1 = 10 dollars.....which makes sense because 10% growth was countered by the 10% inflation.
Nominally you are producing more than last year in US dollars and the average worker is earning more than last year...be it in Takas or US dollars...lets say by 10% (because lets forget about investment, capital inflows through govt loans/net spending and net exports and focus on 100% consumption economy for simplification).
So a worker is earning 10% more than he did last year because of the 10% nominal growth....and his spending money has also increased by 10%....he will find he is still only able to buy the same amount of goods and services that he did last year....and thus he is also producing the same amount since we are talking about production - consumption simple sort of economy.
Basically the entire growth of the economy was done through printing more money. Your economy will increase nominally, but it wont increase in the real sense.....since people are still eating the same number of chapathis each day, buying the same number of TV sets, using the same amount of fuel.....you are in a stasis physically basically.
Thats why REAL growth is preferred to nominal growth at ALL times.
It does not matter if you are able to exchange your income in takas for 10 USD or 11 USD....if the 10 USD and 11 USD buy you the exact same number of goods and services locally. Whats worse is when 11 USD buys you even less than 10 USD did last year....but that is another topic.
There is also a related somewhat nuanced concept of PPP theory which has nothing to do with inflation...with real GDP numbers we are still assuming perfectly even purchasing power of every currency in the world....when comparing between countries.
I hope you understand this before you continue the discussion.
Now specific parts:
And who tell you that BD will alyways have more inflation than India?
When you quote IMF figures, i will point out the intricacies of the full IMF prediction. They are predicting higher inflation in Bangladesh, not me. Take it up with them....or be prepared to accept all their data and predictions and not selective bits and pieces.
In just two yeras ago India had much more inflation than BD,when Rupee depreciated from 45 per dollar to 60 per usd.
Like I said before, depreciation and inflation are two different economic phenomenon. You are mixing up the two. Depreciation/Appreciation is more related to the PPP theory I brought up earlier. If you want me to go into this, tell me...but for the moment it is straying off topic somewhat.
There might even theoretically be a time when 1 Bangladesh Taka buys more US dollars than 1 Indian Rupee.....but Indian Rupee has inflated much less than Bangladest Taka.
You are predicting growth acceleration for India and stagnation for BD.
No. I am predicting growth acceleration in both countries. Just a higher growth acceleration in India. As with all predictions I am liable to be wrong. We will have to wait and see. I am actually more optimistic about Bangladesh than either IMF or World Bank. If Bangladesh plays its cards right it can get to a REAL growth rate higher than 7% and even 8%....which is quite phenomenal. But it needs SHW administration to take up some real strong reforms and initiatives similar to what Modi administration is doing and planning for India....it cannot accelerate much on cruise control. I am confident some of this will happen, more so because SHW administration will be watching what happens in India and implementing the successful ideas themselves....it is a global competition game right?
I only mentioned because you were predicting wider economic gap between the countries which is not true.If analyses past five years performance for both BD and India than you see economic growth in dollar term are very similar for BD and India.
Past 5 years had a lousy govt for India for the majority. "wider economic gap" is such a general statement that I cannot say I predict that... since GDP and GDP per capita is only one small part of economic measurement anyways. For overall economic performance we will again have to wait and see. I too am not a big fan of predictions etc....my only qualm is that you cannot consider MH as the only state economy comparable to Bangladesh when there are many other contenders both by sheer size and dynamism...and improving economic climate. You are free to disagree and lets move on.
Social indicators are better in BD mostly.
Uh not they aren't. Some are better in India, some are better in BD....and there are few major differences in most of them.
To me literacy rates and education are way more important than any other social indicator area....and thats one area where India is far ahead of Bangladesh. You are free to bring up any social indicator and I will give my 2 cents on why India or Bangladesh is worse. The general trend is that there are a few massive states in North India that are severely lagging in various indicators, bringing down the whole average....how those states now change politically to bring in more reform and action oriented govts and bureaucrats will be the main factor in getting these numbers improving at a faster rate.
.So if you ask which country have more growth opportunity in future then most will say Bangladesh.
Ask who exactly? Bangladeshis? Most neutral world sources (World Bank, IMF, UNDP, PWC, citibank, the economist etc) certainly do not think so judging by their growth rate predictions for India and Bangladesh. Most lie at 6-7% for Bangladesh and 7 - 8% for India when we talk about long term real growth rates. Unless you know something they don't?
Our macroeconomic trend is most stable in south asia,we have low debt,positive current account balance,high export and remittance growth,
Most stable? Thats a matter of opinion. If a country is swinging between 6% to 10% growth from year to year....it is not very stable....a country growing at 6% every year is way more stable.....but which hypothetical situation would you prefer?
"Low debt" by itself means nothing. I think what you mean is debt to GDP ratio right? I mean if a country produces 10 dollars worth every year and has a debt of 10 dollars......how would that compare to a country that produces 1000 dollars every year but has a debt of 500 dollars? Latter country has much higher absolute debt than the first one....is it in a worse situation though?
Public Debt/GDP ratio also has its limitations in simply comparing. FYI, Bangladesh has around 32% in this regard and India around 50%...but a country like Japan has debt/GDP of 226%! Singapore a phenomenally well managed country has a debt/GDP ratio of 111%. Many developed countries are in this ball park.....so obviously a simple debt/GDP ratio is not going to give the full story....rather many other factors come in like credit rating, financial stability, political and economic stability. These are all areas where India scores higher than Bangladesh.....there are no allegations of a stolen election, kangaroo courts, vote rigging, political assassinations and threats and an ever present looming threat of a coup and history of coups and history of all of these and bitter politics creating such a schism between the population.
current account balance,high export and remittance growth
Current account deficit in India is marginally around -1.5%...Bangladesh is near 0. Both of these are very low.
Developed countries: US for example has -2.4% UK has -5.5%.
India also has 350 billion USD of forex reserves compared to 25 billion USD for bangladesh. Per capita this is more than 274 dollars for India and 157 dollars for Bangladesh....so the difference in CAD is not a big deal....though credit should be given to Bangladesh that is it in a solid position compared to say Pakistan.
List of countries by current account balance as a percentage of GDP - Wikipedia, the free encyclopedia
List of countries by foreign-exchange reserves - Wikipedia, the free encyclopedia
List of countries and dependencies by population - Wikipedia, the free encyclopedia
high export and remittance growth
Exports per capita:
India: 363 USD
Bangladesh: 194 USD
Ref:
List of countries by exports - Wikipedia, the free encyclopedia
Remittances are already reflected in the CAD argument....its not really something to be terribly proud of either....a necessary evil to give high paying jobs to "surplus" labour because conditions back home economically cannot abosrb them effectively.
world bank is predicting 6.5 growth this year,but it well may cross 7 percent as their forecast is always conservative for BD.It may accelerate even farther in coming years as they are predicting.So only time tell which country will pull farther ahead.
Completely agree. Same is true for India. Best of luck to both countries!
. a year (26th largest in the world). Delhi alone handles around 1500 departures/ arrivals a day. (Compare to Dhaka which sees 100 arrivals/ departures in a day)
It is a domestic airport.What do you expect? Rather you should concentrate on the number of International airport both in BD and Maharastra.Bangladesh have four international airport while Maharastra have three.
So it is irrelevant what Rajshahi airport looks like.
