Navigating the global financial storm: challenges for Bangladesh

Abstract

The Bangladesh economy is largely shielded from the most immediate and direct effects of the financial crisis. However, Bangladesh's exposure to real economy effects of the financial crisis is likely to be greater through exports, remittances, and foreign capital inflow channels. The major sources are the projected slowdown in growth in the advanced economies which may lead to decline in exports (especially of readymade garments) since nearly 87 percent of Bangladesh's exports are destined to markets in advanced countries, remittances may ease as the source economies face lower growth and challenging times, aid inflow may reduce, and Bangladesh's macroeconomic stability and growth prospects may suffer. A liberalized, market based, and effectively supervised and regulated financial sector capable of generating quality information is necessary in order to promote and sustain rapid growth in Bangladesh. The important agenda for Bangladesh is to convert the current global crisis into an opportunity in order to move forward.