Frequent Research Report

Economy Review of Bangladesh for the Fiscal year 2013-14

In spite of last year political turmoil, the Bangladesh Economy has delivered GDP growth of over 6% over the last year. Economic activities recovered in the second half of FY14, driven by resilient exports and domestic demand, following setbacks suffered in the first half due to political uncertainty and turmoil: A recovery in export growth and increases in public expenditure are likely to help achieve more than 6% GDP growth in FY14, higher than the average for developing countries. The political turmoil in the last quarter of 2013 inflicted a value-added loss of about USD 1.4 billion, of which 86% was in services, 11% in industry and the remaining 3% in agriculture. And, despite a heavy reliance on imported oil, this growth has not come at the expense of the external balance. Forex reserves have growth more than 38% in just one years and current account balance remained surplus. FDI has picked up in last fiscal year’s which is also highest in the country history, particularly in the burgeoning manufacturing and industrial sectors. As production cost in China and India rise, we believe Bangladesh is country well placed to capture next round of outsourcing. Bangladesh could become like Mexico, which has established itself as a low-cost manufacturing hub for its enormous neighbor to the north. The analogy is perfectly match with Bangladesh because the country has borders with India and is also close to China – two economies will become the world’s third-largest and largest respectively by 2050 and Bangladesh capture most benefit from these two giant economics in the world.