Presentation on prospective foreign investment in Bangladesh in its current economic, political and financial state. ~ Risk Analysis & Portfolio Management

1. Prospects of
Foreign
Investment in
Bangladesh
FIN 423

2. GDP Growth rate
Year GDP
2014 6.06%
2015 6.55%
2016 7.1%
2017 7.3%
2018 7.9%

3. GDP Growth
● In the last decade, the country has recorded GDP growth rates above 5 percent due to development of
microcredit and garment industry.
● Although three fifths of Bangladeshis are employed in the agriculture sector, three quarters of exports
revenues come from producing ready-made garments.
● Bangladesh has experienced very stable economic growth over the last decade. Over the last 5 years
Bangladesh economy has grown at a 6.982%
● GDP Growth Rate in Bangladesh is expected to be 7.20 percent by the end of this quarter, according to
Trading Economics global macro models and analysts’ expectations. In the long-term, the Bangladesh GDP
Growth Rate is projected to trend around 6.80 percent in 2020, according to our econometric models.

4. Sector Contribution to GDP
GDP form construction 7359.50million
GDP from Manufacturing 22427.00m
GDP from Mining 1747.40m
GDP from Public Administration 3646.30m
GDP from Service 136914.00m
GDP from Agriculture 10468.80m
GDP from Transport 10920.80m
GDP from Utilities 150890.00m

5. Cheap Labor Force and Attractive Labor
Attributes
COUNTRY Per/hour cost
Bangladesh 0.13 US$/hour
India 0.11 US$/hour
China 0.52 US$/hour
Malaysia 0.13 US$/hour
Vietnam 0.80 US$/hour
AGE %
0-14 27.76%
15-24 19.36%
25-64 39.73%
55-64 6.93%
65 6.25%
We have seen growth in labor force. This was mainly due to increase in working age
population (15-64)

6. Demographic Composition
Country 2014 2015 2016 2017 2018 AGE
Bangladesh 29.96 29.42 28.9 28.37 27.76 (0-14)
65.04 65.54 66.02 66.53 66.02 (15-64)
5.01 5.04 5.08 5.1 6.23 (65-olders)
India 29.11 28.66 28.2 27.78 27.34 (0-14)
27.34 65.17 66 66.23 66.43 (15-64)
5.5 5.64 5.81 5.99 6.24 (65-olders)
Source: Bangladesh Bureau of Statistics

7. Demographic Composition (cont’d)
China 16.5 16.6 16.7 16.8 17.15 (0-14)
17015 73.4 73 72.5 71.9 (15-64)
10.1 10.5 10.8 11.4 10.81 (65-olders)
Pakistan 35.9 35.02 34.89 34.78 31.36 (0-14)
31.3 60.3 60.5 60.62 60.73 (15-64)
4.48 4.48 4.49 4.49 4.48 (65-olders)
Sri lanka 24.79 24.58 24.29 24.01 24.06 (0-14)
66.31 66.13 66.02 65.92 67.27 (15-64)
8.9 9.3 9.7 10.07 9.67 (65-olders)

8. Labor Productivity (Education)
YEAR 2016 2017 2018
Bangladesh 17.03 16.13 18.84
India 26.03 26.65 27.13
Pakistan 22.58 23.4
Sri Lanka 29.25 30.9
Source: Bangladesh Bureau of Statistics

9. Labor Productivity (T&D)
YEAR 2016 2017 2018
Bangladesh 17.06 36.98 5.67
India 34.14 34.34 36.89
Pakistan 8.74 8.07
Sri Lanka 23.67 29.6
Source: Bangladesh Bureau of Statistics

10. Labor Productivity (R&D)
YEAR 2016 2017 2018
Bangladesh 3 2.8 2.75
India 36.35 34.34 36.88
Pakistan 7.61 6.95 7.68
Sri Lanka 2.06 2.02 2.05
Source: Bangladesh Bureau of Statistics

11. Comparative GDP Growth Rate
Country Name GDP of 2018 (%)
Bangladesh 7.9
India 7.0
Indonesia 5.2
Malaysia 4.7
Sri lanka 3.2
Source: Bangladesh Bureau of Statistics

12. Comparative GNP
Country Name GNP of 2018 (USD Million)
Bangladesh 286545.007
India 2623369.253
Indonesia 248424.281
Malaysia 87892.280
Sri lanka 20133.520
Source: Bangladesh Bureau of Statistics

13. Comparative Gini Coefficient
Country Name Gini Coefficient of 2016
Bangladesh 39.8
Sri lanka 32.8
Turkey 41.9
Source: Bangladesh Bureau of Statistics

14. Remittance
2018-2019 (Monthly) USD (Millions) Taka (Billion)
June 1368.20 115.61
May 1748.16 147.71
April 1434.30 120.96
March 1458.68 122.83
February 1317.73 110.74
January 1597.21 134.07
December 1206.91 101.26
November 1180.44 99.01
October 1239.11 103.86
September 1139.66 95.45
August 1411.05 118.18
July 1318.18 110.39

15. Export
Export Rate in GDP
2018 14.08%
2017 15.03%
2016 16.65%
2015 17.34%
2014 18.99%
Source: Bangladesh Bureau of Statistics

16. Export (2018-2019)
Year/Month USD (million)
May’18 2918.996
June’18 2531.340
July’18 3164.181
August’18 2570.834
September’18 3005.023
October’18 3020.738
November’18 2707.428
December’18 2788.073
January’19 3239.606
February’19 2765.427
March’19 3225.715
April’19 2988.249

17. Export cash inflow from Different Industry
Industry Cash inflow Contribution to GDP (%)
Fish, Prawn and Shrimp 4087.7 1.49
Jute & Jute Manufactured 7436.6 2.71
RMG 185411.8 67.66
Leather Manufacture 5805.8 2.11

18. Current Account Position (% of GDP)
Country 2014 2015 2016 2017 2018
Bangladesh 0.8 1.8 1.9 -0.6 -3.6
India -1.3 -1.1 -0.6 -1.9 -2.3
Pakistan -1.3 -1 -1.7 -4.1 -5.8
Sri Lanka -2.5 -2.3 -2.1 -2.6 -3
Maldives -3.2 -7.4 -23.5 -21.8 -25
● Bangladesh Current Account
deficit is set to cross the $10
billion mark for the first time in
history in 2018.
● Higher receipt for export do not
compensate for higher payment of
imports.
Source: Bangladesh Bureau of Statistics

19. Foreign Exchange Reserve
Period International reserve in million US$
2013-2014 21558
2014-2015 25025.2
2015-2016 30168.2
2016-2017 33493
2017-2018 32943.5
Source: Bangladesh Bureau of Statistics

20. Total Market Capital (USD Bn.)
● Bangladesh Stock Market
Capitalization has grown by
50% over the past 4 years.
● India stands at 8th position
among the world top 10
countries by market cap.
● Japan has the 3rd largest Market
Cap in the world.
● Srilankan shares post worst fall
on foreign selling.
● Indonesia's Market Cap
accounted for 47.3 % of its
Nominal GDP in Dec 2018.
Country 2014 2015 2016 2017 2018
Bangladesh 34.84 38.44 70.419 86.179 77.319
India 1558 1516 1567 2332 2083
Japan 4378 4895 4955 6233 5297
Sri Lanka 23.665 20.804 18.679 18.96 15.575
Indonesia 422.127 352.271 425.768 520.687 486.766
Source: Bangladesh Bureau of Statistics

21. Market Capitalization (Cont’d.)

22. Bangladesh Equity Market Index

23. India Equity Market Index

24. Pakistan Equity Index

25. Sri Lanka
Equity Index

26. Bangladesh Industry Price Earning Ratio

27. Political Risk Rating

28. Economic Risk Rating

29. Financial Risk Ratings
Economic Indicators Maximum Points Calculated Points
Foreign Debt as a % of GDP 10 9
Debt Service as a % of Export of Goods and Services 10 10
Current Account as a % of Exports of Goods and Services 15 12.46
International Liquidity as months for import cover 5 3.5
Exchange Rate Stability 10 9.83
Source: Harvard Dataverse

30. International Accolades
● Centre for Economics and Business Research (CEBR) in 2019: 41st largest economy
in the world
● World Bank in 2019: Top 5 fastest-growing economies
● 54th largest exporter in the world
● 52nd largest importer in the world
● Top 10 emerging economies after BRIC: Goldman Sachs
● 3rd fasting growing real GDP in the world
● S&P positive sovereign credit ratings: BB (speculative grade)
● Moody’s positive sovereign credit ratings: Ba3 (stable)