1

WEBinar December 15, 2010Jenny Nordgren

Bangladesh – Wakening of a New Market?

2

Steady Growth

Steady growthStrong private consumptionRelatively closed economyLarge share of basic textilesStill below some Asian peers

0

5

10

2005 2007 2009

Bangladesh IndiaIndonesia Sri Lanka

0

2

4

6

8

2005 2007 2009 2011 2013 2015

Real GDP growth, %

3

Strengthened reserve position

Strong inflow of remittances but on a downward path

Resilient exportFX cover 5.5 months of importsLow external debt

0

5

10

15

2001 2004 2007

FX reserves (USDbn)

4

In the eye of the investor

Sovereign rating– Moody’s Ba3, stable– S&P BB-, stable

Higher but still low FDI inflowSeeking a USD 1bn IMF-loan Stock market boom

– A bubble?– Excess liquidity

Dhaka Stock exchange

Source: Reuters EcoWin

Jan2008

Sep2009

May Jan2010

Sep2000

3000

4000

5000

6000

7000

8000

9000

5

Comparative advantages…

Cheap labourLocationLarge populationDemographicsInfrastructure needs

6

…but also challenges

Messy political situationWeak governance and corruptionSevere power shortagesLabour unrest in the garments

sectorWeak banking sectorProne to natural disasters

102107

121134

148

0 50 100 150

WB Doing Business 2010 Index 1-183

Sri Lanka Bangladesh

Indonesia India

Philippines