Bangladesh
In-depth country-focused analysis on Bangladesh's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Bangladesh's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Bangladesh, as well as the latest industry developments that could impact Bangladesh's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Bangladesh before your competitors.

Country Risk

Bangladesh Country Risk

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Core Views

  • Bangladesh will benefit from the power struggle between China and India for dominance of South Asia and the Indian Ocean, as the two giants will want to strengthen their political, economic and defence cooperation with Dhaka. This bodes well for Bangladesh's long term economic growth, which we are forecasting to come in at an annual average rate of 6.3% over the next 10 years.

  • With the return of political normalcy, we are optimistic that investment and export sector growth will start to pick up over the coming quarters, and are forecasting real GDP growth of 6.3% in FY2014/15.

  • We expect the Bangladesh Bank to keep its repo rate unchanged at 7.25% in H1FY15 (July-December), as inflation will likely remain relatively benign, while the economy should recover from the recent political turmoil.

  • The...

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Bangladesh Operational Risk Coverage (9)

Bangladesh Operational Risk

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BMI View: Bangladesh's large youthful population and competitive labour cost structure are two key factors that make it prime investment destination for businesses with labour-intensive operations such as agriculture and manufacturing. However, the country's overall attractiveness is weighed down by an underdeveloped transport sector as well as severe barriers to trade and investment, notably a complicated fiscal regime, high levels of corruption and excessive red tape, which often lead to delays and unplanned expenses. Taking these factors into consideration, Bangladesh is awarded a score of 38.6 in the BMI Operational Risks Index, ranking 22 nd out of 29 Asian countries, in between the Philippines and Laos.

The most severe risk to investors in Bangladesh, according to BMI's Operational Risks index, comes from the significant barriers to trade and investment. The country has a...

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Bangladesh Crime & Security

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BMI View: Bangladesh poses fairly high security risks for foreign business travellers, expatriates and tourists. While many short-term visitors may be unaffected, petty crime is fairly common, including robbery, pick pocketing and scams. Moreover, business operations and employees face risks from domestic terrorist and extremist organisations that have been responsible for a number of attacks throughout the country' 43 year history. While the risk of interstate violence has dissipated in recent years and the country is not presently engaged in any territorial dispute, the small size of its army renders it weak compared to neighbouring states. Bangladesh is awarded a score of 35.8 out of 100 in the BMI Crime & Security Risk Index, ranking 22 ndout of 29 in the region.

Crime rates are relatively high in Bangladesh in terms of physical and sexual assault, and while foreigners are not specifically targeted...

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Bangladesh Labour Market

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BMI View: Low levels of education and literacy are the key contributors to the country's relatively poor performance in Labour Market Risk Pillar of the BMI Labour Market Risk Index. Furthermore low tertiary education enrolment; and heavy unionisation, particularly in the ready-made garment industry further add to costs and limit investment to those requiring low skilled workers. Bangladesh's Labour Market presents a moderate risks for investors in regional terms, with a score of 45.3, placing it 17th out of 29 countries in the Asia region, and positioning it between Philippines and Samoa, and behind India in 12 thplace regionally.

Availability of Labour poses the greatest risk to investors in Bangladesh, with low urbanisation, high underemployment and low levels of education. Despite massive investment in the country's educational infrastructure in the form...

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Bangladesh Logistics

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Investors in Bangladesh, attracted by the country's solid growth prospects face underdeveloped supply chains with business operations hampered by inefficient and poor quality transport network, as well as unreliable utilities availability. Investors are also impeded by excessive trade procedures, which increase trade delays and drive up costs. As a result, Bangladesh's receives an overall BMI Logistics Risk Index score of 47.4 out of 100. This places the country in 18 th position out of 29 Asian states in the regional comparison, in between Pakistan and Myanmar and four places behind its neighbour India.

Based on trade balance, Bangladesh boasts the 12 th largest market in Asia, with further investor attraction stemming from the fact that it has the region's fifth biggest population. The country is poised for strong economic growth in the medium term as real GDP is projected by BMI to increase by 6.2% y-o-y on average....

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Bangladesh Trade & Investment

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BMI View: Despite stable economic growth over two decades, Bangladesh has seen a rise in political instability as a result of a number of factors, including inter-party and ethno-religious tensions, which has negatively affected investment. Furthermore, the country suffers from high levels of corruption and weak enforcement of legislation, which combine to create an inhospitable investment environment. On the other hand, the financial market is relatively well-developed, and with international donor assistance Bangladesh has made great strides in poverty reduction in recent years. Bangladesh presents a high risk for Trade and Investment, sitting fourth place from the bottom of 29 Asian countries with a score of 25.8. It is positioned between Nepal and Laos,   and seven places behind India .

The area with the lowest risk to...

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Bangladesh Industry Coverage (5)

Agribusiness

Bangladesh Agribusiness

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BMI View: We hold a cautious outlook towards the Bangladesh agriculture sector. The latest finding of high levels of toxic substances in poultry feed bring s much cause for concern as it reflects on the low food safety standards employed by the country, even in its largest agriculture sector. Indeed, structural problems still plague the industry. In the medium term , for example, the frequent occurrences of strikes, or hartals and road blockages will keep our optimism for the industry at bay as these often aggravate the logistical challenges of food transportation within the country, causing the biggest hurt to the farmers.

Over the long term, we believe that there is much more room for growth and...

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Commercial Banking

Bangladesh Commercial Banking

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Commercial Banking Sector Indicators 
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Medical Devices

Bangladesh Medical Devices

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Espicom Industry View:  Bangladesh represents a small medical d evice market of just under US$163 mn, similar in size to Latvia or Serbia. Market size is where the similarity ends , however, as Bangladeshi   per capita spending is one of the world's worst, at just US $ 1 per capita. The market is almost exclusively supplied by imports.

Headline Industry Forecasts

  • In 2013, the Bangladeshi medical device market was estimated at US$162.7mn, equal to just US$1.0 per capita. The market is projected to expand at a CAGR of 8.4%, which will...

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Pharmaceuticals & Healthcare

Bangladesh Pharmaceuticals & Healthcare

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BMI View:   We consider Bangladesh 's commitment to another round of spending on the development of healthcare, information technology, infrastructure, energy production, education, agriculture and food security and transportation in fiscal year 2014/2015 as a sound investment. While we are optimistic that ongoing tax reform efforts by the government will rake in more revenues to support development spending, and keep the country's budget deficit manageable at around 3. 0% of GDP over the coming years,   the lack of government revenues remains a major obstacle to Bangladesh's economic development...

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Telecommunications

Bangladesh Telecommunications

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BMI View : Bangladesh's telecommunications market continues to be challenging. There is no clear delineation between the regulatory duties of the government and the independent regulatory authority, making it difficult for new services and products to be approved in a timely manner. The over-complex licensing regime - and the excessive one-off and annual fees associated with licences - represent a further barrier to improving confidence. However, the government intends to overhaul the regulatory system and bring greater clarity to routes to market for all players. BMI does not expect rapid progress to be made, particularly while the state-owned players continue to benefit from government support. Meanwhile, newly-launched 3G services continue to be rolled out, enabling operators to launch new value-added services to Bangladesh's under-developed...

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