Bangladesh is likely to recover faster than its Asian peers from the Covid-19 fallout thanks to improving exports, growth in domestic consumption and remittance inflow, according to a study of Standard Chartered bank.
In fiscal 2020-21, the economy will bounce back led by growing exports and remittance, which will also give a boost to consumption, it said.
Anubhuti Sahay, head of South Asia economics research of Standard Chartered Singapore, presented the findings of the study titled "2021 Outlook: The Road to Redemption" at a virtual discussion organised by the Bangladesh-German Chamber of Commerce and Industry (BGCCI).
The bank expects global growth to rebound to 4.8 per cent in 2021, she said.
Global trade has bounced back but exports are yet to reach pre-pandemic levels, Sahay said.
Bangladesh is likely to be an outperformer in the Asian region, according to her.
A good number of companies are shifting their manufacturing facilities from China to Bangladesh, she said.
Bangladesh will face some long-term challenges after its graduation from the least developed country (LDC) category by 2027, if the developed and developing countries do not continue extending the LDC facilities to it, Sahay said.
For instance, the LDCs enjoy 136 different kinds of international support measures, but once the country is graduated, all those measures would be eliminated.
Bangladesh is likely to lose between 5.5 per cent and 7.5 per cent of its exports because of the economic graduation, she said in the presentation.
Ministers, diplomats, businessmen of Bangladesh and Germany, trade body leaders and exporters took part in the discussion moderated by Shahed Akhtar, executive adviser to the BGCCI.
Commerce Minister Tipu Munshi said a high-powered trade delegation will visit Germany this year to increase bilateral trade and investment.
The minister invited German businesses to invest in Bangladesh's special economic zones as the government is developing 100 economic zones across the country.
Germany is the only country where Bangladesh's exports grew post-June 2020 and the majority of shipments was based on manmade fibre-based products, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.
She urged the German companies to invest in local manmade fibre, polyester staple fibre and light engineering sectors as those are growing rapidly in Bangladesh.
The German economy is set to rebound in 2021 and 2022, said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue.
"Bangladesh will also see a rise in export to Germany."
German investment in Bangladesh is low, he said, adding that the western European country still has a huge opportunity here and it should take steps to make proper use of the preferential access Bangladesh enjoys in the EU.
He also mentioned about setting up country-specific economic zones in Bangladesh, which will help to increase foreign direct investment in the country.
When buying slows down in Germany, it affects consumers' buying behaviour in other countries because Europe buys as a whole, said Syed Nasim Manzur, managing director Apex Footwear.
He also stated that Bangladesh will definitely outperform and is already outperforming thanks to the bold leadership of the government and resilience of Bangladeshi workers.
On the other hand, he urged German small and medium enterprises to focus more on the markets of Bangladesh because they are missing a huge trade opportunity.
Nasir Ezaz Bijoy, CEO of Standard Chartered Bangladesh, stressed the need for smooth export financing, introduction of export credit guarantee scheme and aggregation of large project for faster recovery of Bangladesh.
Jan Moritz, managing director of Julius Hüpeden, discussed how the coronavirus pandemic has affected the buying behaviour of consumers and made a significant downward trend on apparel turnover.
Germany is the largest export destination of Bangladesh in Europe, said Mosharraf Hossain Bhuiyan, Bangladeshi ambassador in Germany.
He also shed light on his meetings with various heads of the foreign trade departments, according to a statement of the BGCCI.
Some are coming forward, as a German garment maker is planning to establish a manufacturing plant inside Adamjee EPZ, Bhuiyan said.
He said there is immense opportunity to grow business between the two countries. Marck Wengrzik, managing director of AKA Export Credit; Christine Jordan, head of structured export finance at Standard Chartered Bank AG; Zafar Sobhan, editor of the Dhaka Tribune; Javed M Ahmad, CEO of Aprosoft Boston, and Omar Sadat, BGCCI president, also spoke.