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Increased remittances hint at hope for the exchange rate crisis
Bangladesh witnessed a 184 per cent growth in the number of Bangladeshi workers sent abroad with a 23 per cent increase in august 2022 alone. This huge influx of workers is explained largely by Malaysia’s current and future plan to recruit about 500,000 workers in the next three years. What this means for Bangladesh's Economy is a huge expected remittance inflow from Malaysia to Bangladesh (estimated to exceed over the US $3.0 billion). This hints at an increased foreign exchange reserve leading to an improved current account deficit of the nation. This could further assist in stabilizing one of Bangladesh’s biggest challenges- the rising exchange rate.
The Goal is 10pc market share worldwide
The BGMEA is aiming to achieve a global market share of 10% by 2025 from 6.8% at present. They are quite optimistic as recent statistics of the global apparel market are expected to reach $842billion in 2025 and $1,138billion in 2030. Despite increased worldwide instability due to the continuous Russia-Ukraine war and runaway inflation, clothing exporters are bullish as work orders are moving from China to Bangladesh to a great extent because of the waiting exchange pressure between the two biggest economies within the world and a dearth of specialists within the Chinese attire segment. However, political stability is much needed for BGMEA fulfilling this aim along with inflation rates in European countries.
Dhaka faces a crossroads as joining RCEP is explored
Dhaka faces an uphill battle as they contemplate joining the world’s largest trade bloc, RCEP. Experts caution over joining the China-backed trade bloc without first thoroughly assessing the repercussions. Bangladesh is set to lose its preferential market access to most nations as it prepares to transition from an LEDC in 2026. Dhaka, on the other hand, is hopeful of securing some privileged market access, notably in the west. Joining (Pls replace joining if you can) the RCEP may put it at risk. Furthermore, joining the RCEP is likely to cost Bangladesh a substantial portion of its import revenue due to the free trade agreement. This will also increase domestic competition, hurting local businesses. Nonetheless, joining the RCEP will promote bilateral trade and investment with RCEP member nations.
Uber Paves Bangladesh's Service Sector on its Road to Progress
Uber, one of Bangladesh's reliable transportation service providers, contributed 45B BDT to the economy, at the same time generating 70B BDT in consumer surplus. From primarily consisting of small-scale vendors and rickshaw pullers, the development transformation of the service sector with the entry of firms like Uber is generating higher incomes for the participants of it, ultimately leading to greater affordability, consumption and livelihoods, all positively impacting Bangladesh's GDP. With competitors like Obhai, Pathao, Chalo and Taxiwala, the fares are to remain competitive in this industry, shielding customers from price exploitation and retaining efficient business operations of these firms, ensuring productivity.
China decides to get back its growth streak.
In the hope to revive their economy, the Chinese government cuts their interest rate and mortgage reference by a huge margin. However, the central bank speculates a risk of high inflation and capital flight. Earlier China lost their growth momentum as its economy slowed down while investment banks revised down their GDP growth forecasts. This policy is supposed to stimulate the financial markets in the long run but strategists think that the cut wasn’t big enough for the desired impact.
Concerns for Bangladesh: India levies a 20% export duty on rice
On September 8, 2022, anticipating a decline in rice production, India imposed a 20% export duty on numerous rice variants discouraging exports. The move has sparked concerns about the potential disruptions in the domestic rice markets. Moreover, this development comes in the face of both a dry spell in Aman cultivations, the second-biggest source of rice grains, and when private rice importers were looking forward to higher rice imports, owing to slashed import duties by 10-15%. To mitigate the potential instability, the government is looking forward to other potential rice importing countries such as Vietnam, Thailand, and Myanmar. Furthermore, these predicaments take shape, while the country reels through one of its worst economic phases, where the national food inflation stands at 8.19% (BBS).
https://www.thedailystar.net/business/economy/news/fresh-concerns-bangladesh-3114966
SOUTH-EAST ASIA WORRIED OVER HIGH INFLATION RATES IN EU
The European Union is likely to experience an economic blow which can result in a recession. American investment banking giant, JP Morgan Chase has warned against a 2% contraction of the eurozone economy. Several factors like persistent inflation and an energy crisis have pushed household and business bills and led to an economic decline. A decline in the EU economy will likely cause a blow to the Southeast Asian countries' economies as the EU is the fourth largest trading partner. The EU recession will have a significant impact on the Southeast Asian exports, tourism and investment sectors which will trickle down and negatively impact the economy of these countries.
https://www.tbsnews.net/analysis/eu-recession-fears-spark-concern-southeast-asia-494262
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