2. Information for Dutch Companies

Macro economy2

Bangladesh is located centrally (and hence economically favorable) in South Asia. Economically strong performers like China, India, Malaysia and Thailand are easily reached by road, air or sea route. Bangladesh considers itself a small country, but with approximately 140 million hardworking people Bangladesh clearly is a (potentially) large market. Although today, Bangladesh is still a low income country ($470 per capita in 2005). Tomorrow, however, Bangladesh could very well become the next emerging market in South Asia.

Bangladesh’s macroeconomic performance has been relatively good. Average GDP growth has been over 6% during the last 4 years, while average annual inflation has been relatively low at around 6.5% (see table 1). The forecasts for economic growth and inflation show similar figures. The resilience of the economy to external (gas/oil prices, end of the MFA³ ) and internal shocks (i.e. floods) are quite remarkable. A big contributor to GDP growth is exports, particularly the export of Ready Made Garments (RMG) which accounts for approximately 75% of total exports.

With an export growth rate of 23%, FY 2005/06 has been a record year for exports. However, despite the continuous high growth in exports, Bangladesh imports more than it exports. Imports consist amongst others of inputs for the RMG sector, crude petroleum and petroleum products, machinery and machinery parts, iron and steel, consumer goods, animal and vegetable products, and inputs used for construction. Bangladesh’s trade deficit is on average approximately USD 3000 million. Main trade partners of Bangladesh (in descending order of value) are India, China, Singapore, Japan, Hong Kong, Kuwait, Taiwan, Republic of Korea, Thailand, USA, Australia, Malaysia, Germany, Switzerland, Uzbekistan, Italy and Brazil⁴.

 Table 1 - Key economic figures Bangladesh (% change unless otherwise indicated)