COVID-19 Update for Investors

Trends of macro-economy, trade and investment

Despite the global economic downturn, Bangladeshi economy has been deemed relatively resilient to pandemic shocks, although the country’s trade and investment have experienced adverse impacts particularly during the initial stage of the COVID-19 pandemic. The latest observations on macro-economic performance, trades and investments are stated as below:

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Gross Domestic Product (GDP) growth

Despite the global impacts by the COVID-19 pandemic and the consequent measures to restrict the people’s mobility through the nationwide lockdown, Bangladesh shows relative macro-economic resilience with estimated GDP growth of 5.5% in FY2020-21, followed by 3.5% in FY2019-20. Bangladesh was among the few economies of positive growth in 2020, and is ranked 40th resilient economies in the face of the COVID pandemic adversities, being the top among the South Asian nations (Bloomberg’s COVID Resilience Ranking on May 2021). According to the IMF, Bangladesh is forecasted to remain ahead of its neighbors in terms of per capita GDP in the next five years to 2026, while managing the difficult time of the post-COVID economic era.

Trade performance

Export: The country’s export was significantly affected right after the COVID-19 outbreak, because of the global demand slump followed by rampant order suspension or cancellations of major export items, ready-made garment, and further deteriorated by the backlog in export shipping. Export also confronted material input constraint, arisen from the disruption of regional supply-chain. Destinations of the country’s major export items have been revitalizing from the beginning of 2021 onwards. Export which ended up to USD 33.6 billion in 2020 has recorded a 15% growth in 2021 and would reach USD 39.7 billion by 2023 under a business-as-usual (BAU) scenario, according to the Bangladesh Bank.

Import: The country’s import was also contracted during the initial stage of the COVID-19 pandemic in parallel with the downturn of export processing industries and because of material import disruption, stagnated construction works and consumer demand slump. Total import value declined particularly between Feb. and May 2020, but has later been showing the sign of recovery. According to a projection by the Bangladesh Bank, overall import value would recover to USD 53.7 billion in 2023 under a business-as-usual (BAU) scenario from the declined value recorded in 2020.

Foreign Direct Investment (FDI) inflow Compared to before the COVID-19 pandemic, FDI inflow (net) to Bangladesh has slightly declined. Throughout the pandemic period, however, FDI inflow volume (net, in quarterly basis) has been maintaining a range of USD 550 to 600 million. Even during the COVID-19 period, FDI inflow in the form of equity has doubled.

Investment project registration with BIDA

The COVID-19 pandemic has adversely affected the new foreign project registration with BIDA. During the lock down period in Bangladesh (from Apr. to Jun. 2020), the number and value of new project registration was drastically declined but has been on the recovering trend since Oct.-Dec. 2020.

New foreign project registration
		Number	Value (in million USD)
FY 2019-20	Oct-Dec	60	1,325
	Jan-Mar	47	268
	Apr-Jun	6	16
FY2020-21	Jul-Sep	19	113
	Oct-Dec	30	687
	Jan-Mar	37	78
	Apr-Jun	16	19
FY2021-22	Jul-Sep	11	147

Source: BIDA