Costs (demerits) of economic growth

1. It leads to rural-urban   migration. As the economy   grows,  people  tend  to shift  from  rural  areas to  urban  centers  where  there  are  better  opportunities    as  a result  of  urbanization    .This  leads  to development of   slums,   open   urban   unemployment,      increased    crime    rate   and   poor   living conditions  in general.
2. It leads to technological unemployment.  As the economy   grows, there  is increased   use  of capital intensive   techniques  of  production   which   in  the  long  run  replaces   labour   hence   technological unemployment.
3. Overexploitation of natural resources. Increased production  of goods and services leads to over exploitation    of natural   resources   like forests   and minerals.   This leads   to exhaustion    of nonrenewable resources hence lack of self-sustainability    in the long run.
4. Environmental degradation.  In  a  bid  to  increase   the  volume   of  goods   and   services   in  the country,   there  is development   of  more  industries   which  leads  to  environmental    degradation    in form of noise,  air and water  pollution.
5. It promotes regional income inequalities in economy. If economic   growth is emphasized   without equity, business owners realize high incomes as compared to the employees   and the rural peasants. This widens the income gap between the rich and the poor.
6. Economic growth involves foregoing current consumption and investing most of the incomes in order to increase  output in future.  Resources   are allocated   for the production   of capital   goods, provision of education,   health etc. which increases   the productive   capacity of a country in future. This leads to a decrease in current consumption   of goods and services.
7. Occupational hazards. Economic   growth leads to increase   in level of occupational hazards   in form of increased in workloads, high level of accidents at work, occupational   diseases etc.
8. It increases economic dependence of the economy.  This is due to increased borrowing   as a way of rising capital for investment   external economic   dependence.                                             .
9. Leisure is foregone. Individuals   forego leisure   due to hard work required   to achieve   economic growth yet leisure is vital in improving the welfare of people.
10. It accelerates profit repatriation. This is true if production is dominated    by Foreign   Direct Investments.
11. It leads to the loss of craftsmanship. The increased   dependence   on  the  use  of  machines   like computers  and other  capital  equipments  leads  to loss  of natural  creativity  in the long run.
12. Breakdown of cultural   norms or values.  With   modernization    people   tend to adopt   western cultures   and  neglect   the  good  cultural  and  social  values  which  can  bring people   together.   This undermines nationalism   in the economy.

Summary

• Leads to unemployment (due to automation/technological development/collapse of firms
• Widens income (and wealth) disparities.
• Lead to decline in social and cultural values/cultural erosion/ leads to individualism.
• Leads to imbalance in regional development.
• Promotes rural-urban migration and its evils.
• High level occupational hazards
• Exhaustion of non-renewable resources due to over-exploitation
• Capital outflow.
• Increased/high dependence on external resources/debt burden.
• Low quality of output.
• Leisure time is sacrificed.
• It is leading to environmental degradation/pollution.
• Sacrifice of current consumption (in order to save for the future).