Fall in growth rate: Can it be reversed?

The Bangladesh economy was little affected and instead it showed resilience even in the most turbulent period of the global financial crisis starting in 2007. Export of readymade garments, the major export item of the country, could mostly avoid the onslaught of the global economic recession followed by the world financial crisis.  However, aftermath of the initial phase of the financial crisis and subsequent global economic recession tell a different story.
Growth of the export-based economy of Bangladesh is markedly influenced by growth dynamics of global economy, particularly by the growth trend of its export destination countries like the USA, the UK and the EU. Global GDP growth vis-à-vis GDP growth of the USA, the UK and the Middle East (ME) went down in 2013. Europe continues to be in recession with signs of improvement in 2014 and 2015. The USA and the UK would have modest growth from next year with further pickup in 2015. (Source: Citi N.A., Economy Watch).
But recent political development in Bangladesh has raised concern over whether it would have any bearing with the country's export destination nations and regions.
All the export destination countries and region have experienced low import demand in 2013 leading to substantial fall in export growth of Bangladesh. Higher import demand forecast for these countries in 2014 and 2015 is a hope for higher export earnings for Bangladesh in these two years.
The EU would enter a positive territory so far as its import growth from a negative 0.4 per cent to positive 2.1 per cent and 2.2 per cent in 2014 and 2015 respectively.
An expected rise in the US import growth from a lower 1.8 per cent in 2013 to 5.7 per cent and 6.3 per cent in next two years is a very good signal for export growth of Bangladesh in 2014 and 2015.
However, the prospect might be lost in case Bangladesh fails to maintain a peaceful political atmosphere. This would lead to a path of negative growth in export, import and remittance during 2014 and 2015 as forecast by different global economic watch bodies as depicted in Fig-3.
The Bangladesh economy, though not substantially affected by the on-going global recession since the financial crisis of 2007, received first level moderate shock during FY08-09 recovering in line with the developed countries during FY10 and FY11 and experienced second shock in FY12-FY13. A moderate recovery is forecast again in line with the expected recovery to take place during FY14 and FY15 in the EU, the USA and Britain provided Bangladesh can capitalise the advantage.
Except a remarkable rise of export and import in FY11, foreign trade and remittance earnings by Bangladesh registered a sharp decline showing that the country could not ward off global spillover effect of the recession. The situation is noticed for remittance inflow registering 2.2 per cent negative growth and import and export having moderate 6.1 per cent and 7.1 per cent actual growth respectively in calendar year 2013.
The downward trend in the performance may not be checked if the country cannot avoid politics of intolerance and coercion, undermining the culture of respecting the opposition viewpoints and the spirit of inclusivity - the basis of true democracy.  
Dr. S. M. Ali Akkas is an economist and financial analyst.
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