Bangladesh records the highest Trade Confidence Score with respondents particularly positive about the outlook for trade volumes, trade with Europe and buoyed by lower costs for logistics and materials and higher profit margins. The favourable current backdrop of strong domestic growth and supportive macroeconomic policy has given Bangladesh a good opportunity to implement some much needed reforms. This impetus towards reform should improve Bangladesh’s attractiveness to FDI investors. The country is expected to attain average exports growth of 10.6 percent from 2017-20, helped by infrastructure development, currency competitiveness in Europe, and trade liberalisation. Clothing and apparel accounts for around three-quarters of Bangladesh’s exports but seven out of the eight different goods sectors are forecast to grow at a double digit pace from 2016-20. This was viewed at HSBC’s Trade Forecast Report on twenty-five countries released on Wednesday. “We expect Bangladesh’s GDP to grow by more than 6.5 percent in 2015 and 2016, helped by accommodative monetary policy and expansionary fiscal policy. Public investment into transport and energy infrastructure has risen notably in recent years and this should help attract more FDI, encouraging more export diversification. But Bangladesh will also maintain the strong foothold it has the global market for textiles and garments,” the report added. The country’s trade confidence score rose to 131, a full twenty-three points higher than H1 of 2015, despite the weaker global outlook over the same period. Bangladesh is now the highest scoring country among twenty-five states reviewed under the report. Indeed, more than two-thirds of respondents expect trade volumes to increase over the next six months, up from less than half six months ago. More than half of respondents see Asia as the most promising region to do business with over the next six months, little changed from the previous survey. And despite the gradual downgrading of growth expectations for China in recent years, 30 percent still see it offering the best opportunities for growth of international business, up from 22 percent six months ago. The European Union is Bangladesh’s biggest export partner and 37 percent of respondents see Europe as the most promising region for business, nearly twice as many as six months ago. Nearly 40 percent of respondents cited unfavourable changes to government regulation as a possible barrier to growing their international business over the next six months. A third of respondents raised concerns about higher interest rates, likely reflecting both global uncertainties over the timing of upcoming tightening in the US and also domestic concerns over possible food price pressures.
