Bangladesh Country Risk Report Q1 2016, New Report Launched

Core Views

• Bangladesh's trade balance is likely to worsen slightly in FY2015/16 (July-June) as imports will continue to surge on the back of a strong taka. However, a modest recovery in the export sector and strong remittance growth will lend support to the current account balance, which should in turn help to maintain external stability. As such, we forecast Bangladesh's current account deficit as a share of GDP to come in at -0.5% of GDP, versus -0.2% in FY2014/15. This reflects a relatively well-balanced economy, which should be positive for medium-term growth.
• Bangladesh's economy will likely grow by 6.5% in FY2015/16 (July-June), similar to the rate in FY2014/15, on the back of robust expansions in the industrial and services sectors. However, the global economic slowdown and domestic security threats pose downside risks to our optimistic view.
• Bangladesh's budget deficit as a share of GDP will widen to 4.3% in FY2015/16 as expenditure growth will likely outstrip revenue growth over the coming months. This will bode poorly for Bangladesh's economy over the medium term as increased government borrowing will likely raise deposit and lending rates, which will in turn crowd out private investments.
• Bangladesh Bank (BB) will likely hold off on interest rate cuts in FY2015/16 (July-June) as it remains handcuffed by volatile headline inflation and rising core inflation in the economy. Moreover, the central bank's intervention in the foreign exchange market will continue to exert upside pressure on money supply growth, which will likely keep the consumer price index elevated. Over the coming months, BB will sustain its selective easing measures to support growth in the Bangladeshi economy.
• The recent series of domestic terror attacks in Bangladesh could pose downside risks to political stability as the ruling Awami League appears to be trying to gain political mileage by blaming the opposition, Bangladesh Nationalist Party. The rise of domestic security threats could also have an adverse impact on the country's economic recovery by deterring investors and weighing on the tourism sector.

Major Forecast Changes

We have revised Bangladesh's real GDP growth forecast upwards to 6.5% in FY2015/16 (from 6.0% previously) as the stabilisation of the political climate will likely boost investor confidence and provide support for the country's industrial and services sectors.

The Bangladesh Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Bangladesh. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Bangladesh's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Publisher Research.

Key Uses

• Forecast the pace and stability of Bangladesh's economic and industry growth through end-2019.
• Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
• Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
• Contextualise Bangladesh's country risks against regional peers using Publisher's country comparative Risk Index system.
• Evaluate external threats to doing business in Bangladesh, including currency volatility, the commodity price boom and protectionist policies.
• The Bangladesh Country Risk Report by Publisher Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Bangladesh' economic policy-making and performance impact on corporate profitability over 2015-2019?

Publisher provides our fully independent 5-year forecasts for Bangladesh through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Bangladesh Country Risk Report features Publisher's forecasts with supporting analysis for 2015 through to end-2019, set against government views and Publisher's evaluation of global and regional prospects.

Key Areas Covered:

Data:

• Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
• Publisher's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis

• Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
• Balance of Payments - trade and investment, current and capital account.
• Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
• Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
• Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
• Foreign Direct Investment - approvals, inflows and climate.
• External Debt - debt profile (short and long-term plus public and private sector obligations).
• Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

• Rely upon Publisher's 100% independent forecast scenarios for Bangladesh and underlying assumptions - we take no advertising and are privately-owned.
• Exploit the benefits of Publisher's comprehensive and reliable macroeconomic database on Bangladesh, sourced and fully maintained by Publisher from an extensive network of private sector, government and multilateral contacts.
• Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from Publisher's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Bangladesh over the next 5-years?

Publisher's Bangladesh country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

• SWOT Analysis for the Bangladesh Market - Political Strengths, Weaknesses, Opportunities and Threats facing Bangladesh.
• Political Stability and Risk Assessment - Publisher's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Bangladesh's risk are compared with regional and global averages.
• Current Administration and Policy-making Publisher assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
• Long-Term Political Outlook Publisher examines the structural risks to the stability of Bangladesh’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

• Benchmark Bangladesh's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
• Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
• Gain valuable insights into government and policy-making, through Publisher's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Bangladesh?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Bangladesh against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

• Labour Market Risk (Education; Availability of Labour; and Labour Costs)
• Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
• Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
• Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

• Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
• Assess your company’s exposure to country specific operational and business risks, using Publisher’s insight on the current dangers of operating in the market.
• Evaluate Bangladesh’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

Spanning over 39 pages “Bangladesh Country Risk Report Q1 2016” report covers Executive Summary, Political Outlook, Economic Outlook, 10-Year Forecast, Operational Risk, Global Macro Outlook.

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