Bangladesh’s economy has witnessed steady growth in the past decade, with the country’s annual gross domestic product (GDP) growth rate at 7.86% in 2018. It is poised to increase by 7% on an average till 2033, according to a forecast by the Centre for Economics and Business Research (CEBR).
With a rising per capita income and a growing middle-class population, there has also been a notable increase in domestic consumer demand. This is a positive sign, as increased domestic consumption reflects a certain insulation of the country’s economy from global headwinds. The Bangladesh government has been proactive in the country’s progress, as is evident from increased government investment in various initiatives. Some of these are in the realm of infrastructure, such as the Padma Bridge and the Karnaphuli Tunnel. Bangladesh is also working with China on the regional Asian Highway and the ‘One Belt-One Road’ project. The Government is also in the process of strengthening ties with India, Bhutan and Nepal, and this is expected to facilitate more investment and global tie-ups. Government support can also be seen in the power facilities, with 7,000 MW of electricity being added to the national grid. Additionally, Bangladesh’s Power System Master Plan (PSMP) targets uninterrupted power supply, and this is expected to increase the country’s power generation capacity to 34,000 MW by 2030.
The country’s burgeoning growth and relatively stable political scenario have attributed to steady and positive sovereign ratings, as Moody’s and S&P’s reports indicate. The reports underline that ‘Bangladesh is a mobile economy on the verge of moving up the economic ladder’. Its stable growth rate of population at 1.2% since 2013 and young workforce – 60% of the populace is in the 15-64 age group – also contribute to the growth trajectory of the economy. Bangladesh is already being recognised as a thriving investment hub, and this is reflected in the country’s foreign direct investment (FDI) inflows. Bangladesh’s FDI stood at USD 2.58 billion at the end of June 2018. According to the Bangladesh Investment Development Authority (BIDA), there was 13.34% growth in FDI in the third quarter of 2018, with proposals worth USD 3.23 billion in the basket. The government’s mega projects were viewed as the primary reason for drawing substantial FDI investments in the transport, storage and communications sectors. Besides domestic consumption, exports from the country are also thriving. Bangladesh exported goods worth USD 6.88 billion to the US in 2018-2019. This ranks the US as the primary export destination for Bangladesh, followed by Germany and the UK. This comprehensive report is a study of Bangladesh as an investment destination. The positives of investing in Bangladesh today are many. Preferential trade benefits and friendly investment policies are offered to countries investing in Bangladesh. The first chapter outlines the demographics, and financial and economic indicators that support this fact. The second chapter looks at the processes, funding opportunities and incentives available to companies wishing to enter the Bangladesh market. The third chapter delves into the regulations and policies that need to be adhered to for investment in Bangladesh. The subsequent chapter offers a step-by-step account of the processes involved in setting up business operations in the country, while the concluding chapter looks into the future of Bangladesh as an investment option.
We hope the report serves as a ready reckoner for prospective investors planning to invest in this riverine country.
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