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Economic slowdown in India and China may hit Bangladesh: Analysts

Discussion in 'Bangladesh Defence Forum' started by Black_cats, Dec 2, 2019.

  1. Black_cats

    Black_cats SENIOR MEMBER

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    Economic slowdown in India and China may hit Bangladesh: Analysts

    ECONOMY
    Jahidul Islam
    30 November, 2019, 12:00 pm
    Last modified: 30 November, 2019, 08:05 pm

    https://tbsnews.net/economy/economic-slowdown-india-and-china-may-hit-bangladesh-analysts

    Indian economy reached its peak with 8.2 percent in 2016 but dropped to 6.8 percent in 2018. In the September quarter last, the rate decelerated to 4.5 percent, according to a report of Mint.

    Meanwhile, China's economy, after maintaining a sustained growth averaging above 10 percent for three decades, began receding in 2011 and came down to 6.6 percent last year. It may fall further to 5.5 percent in the next two years, forecast an International Monetary Fund.

    Economic slump in the two neighbourly countries will decrease their purchasing capacities, resulting to a decline in Bangladesh's export volume in these destinations, while inflation may raise the prices of products, capital machineries and intermediate goods, experts fear.

    Dr Zahid Hussain, former lead economist of the World Bank's Dhaka office, said the socio-economic scenario of Bangladesh is almost similar to that of India and factors shrinking the Indian economy may hit Bangladesh hard.

    "The crisis of the Indian economy began in the early 1990s when the economy shifted its focus to the service sector. It invested huge amount in the service sector and achieved a high growth in information and communication sector but neglected the manufacturing sector," he said.

    Bangladesh has a comparatively better base in the manufacturing sector. But the country is facing more problems than India in other indicators such as banking, infrastructure, environment of doing business and reforms, he explained.

    "India is not a significant export market of Bangladesh. That's why any slowdown in Indian economy may not impact our overall export earning," he said, adding, "But, our consumers may have to pay more for Indian products because it is one of the largest import sources."

    According to the Export Promotion Bureau, Bangladesh's export earnings from India last fiscal reached $1.25 billion for the first time. But the export value to China has been fluctuating between $694.97 million and $949.41 million for the last four fiscal years.

    Downturn in the Chinese economy may impact the economy of Bangladesh both positively and negatively, said Dr Ahsan H Mansur, the executive director of the Policy Research Institute of Bangladesh.

    Despite being a huge market, China imports products worth less than $1 billion from Bangladesh. Decreasing competitiveness of the country could open the door for Bangladeshi products in China and other countries.

    "China is the largest source of raw materials and capital machineries of garment and many other manufacturing industries of Bangladesh," he said, expressing concerns that costs of industrialisation and production may rise further due to the slowdown in the Chinese economy.
     
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  2. Bilal9

    Bilal9 ELITE MEMBER

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    Bull$hit article.

    What are the sources of the slowdowns in Chinese and Indian economies??

    Those sources have no connection with Bangladesh industrial activity or GDP.

    China is not a huge market for us and neither is India (with all the non-tariff barrier Bull$hit they have been pulling of late). Like Zahid Sir already said.

    Slowdown of demand will make infra items, industrial inputs and other products more available for Bangladesh, such as new power-plants and construction equipment.

    And I don't agree with,

    If Indian economy is in a slump, their currency is already devalued against ours, so Indian products may become cheaper, not more expensive.

    @Homo Sapiens bhai, I'm no economist, but you have a better idea, what do you say?
     
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  3. Black_cats

    Black_cats SENIOR MEMBER

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    Economic slowdown in India to impact BD, fears Muhith
    BIDS event underlines accurate data for policymaking
    FE REPORT | Published: December 02, 2019 10:00:08 | Updated: December 02, 2019 10:24:03

    [​IMG]Former Finance Minister A M A Muhith speaking at the inaugural session of the BIDS-organised two-day research almanac in the city on Sunday. Former finance minister M. Syeduzzaman (extreme left), Bangladesh Planning Commission Member Dr. Shamsul Alam (centre), Planning Division Secretary Md. Nurul Alam (2nd, right) and BIDS Director General Dr K A S Murshid are also seen — FE Photo

    Former finance minister A M A Muhith has said Bangladesh's economic growth might be impacted by the slowing down of neighbouring India's economy.

    "To my mind, the ongoing sluggish trend of Indian economy may impact Bangladesh's Gross Domestic Product (GDP) projection," said Mr. Muhith, who had served more than a decade as the country's finance minister.

    "We should be careful about the slowdown of Indian economy. The slow GDP growth of India has impact on the regional economies."

    He opined that Bangladesh should be worried about the falling trend of Indian economy [as it is the largest trade partner of Bangladesh].

    The former finance minister also noted that there is need for discussion with India [regarding the economic condition].

    "We need to discuss with the Indian authorities concerned about what has been happening in their economy."

    He, however, said Bangladesh's economy may remain buoyant in the next 2-3 years.

    Mr. Muhith said these while speaking as the chief guest at the inaugural session of the two-day research almanac, organised by the Bangladesh Institute of Development Studies (BIDS) in the city on Sunday.

    The Indian GDP has been continuing its downward spiral for the seventh consecutive quarter, falling to 4.5 per cent in the second quarter (July-September) of the fiscal year (FY) 2019-20.

    The GDP growth of last quarter, ending in September, was the slowest in more than six years.

    Indian economy previously achieved a 4.3 per cent GDP growth in the final quarter (January-March) of FY 2012-13.

    Mr. Muhith also said poverty still remains a pain for Bangladesh's economy.

    "We still have around 30 million people living below the poverty line. It is hardly possible to get such a large population in many countries."

    He noted that the BIDS was first established in Karachi, and later was shifted to Dhaka. It is a good institution that Bangladesh inherited from Pakistan.

    "We need more such institutions in the country, as their works are very much relevant to policy formulation."

    "We have some research organisations in the private sector, and they are rubbish," he added.

    Another former finance minister M. Syeduzzaman also joined the inaugural function as special guest.

    Dr. Shamsul Alam, senior secretary and member of the General Economics Division (GED) of the Bangladesh Planning Commission, and Md. Nurul Alam, secretary of the Planning Division under the Ministry of Planning (MoP), also attended the programme as special guests.

    The BIDS director general Dr K A S Murshid moderated the inaugural session.

    Syeduzzaman said Bangladesh's economy now has major challenges, like - income inequality in the society, financial sector, job creation, and increased female participation in the labour force.

    Dr. Alam, in his speech, stressed the need for accuracy of data.

    "If we don't get accurate and quality data, the policies prepared by using such (inaccurate) data will not work."

    "I'm confused about the data, as it does not match with the country's rice market and recently with onion market," said the GED member.

    He further said: "Given the rice production data, we should have a surplus of 5.0-6.0 million tonnes of rice. But we import around 1.0 million tonnes of rice almost every year." "I don't understand why it happens so, if the official data is accurate."

    Similarly, local onion production is around 2.2 million tonnes per year, which is very close to the country's annual demand of 2.3-2.4 million tonnes.

    "If the production is ample, could we believe it is market failure due to inefficient distribution of goods and services?" He also suggested the BIDS to conduct researches on the financial market, as there are many media reports on the market.

    "You can check as to whether the banking sector has oligopoly or not," he added.

    jasimharoon@yahoo.com

    https://thefinancialexpress.com.bd/...in-india-to-impact-bd-fears-muhith-1575259208
     
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  4. fallstuff

    fallstuff SENIOR MEMBER

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    A scenario where a 20% drop in export will be a tiny amount as export to both of these countries is less than $2 billion in total.
     
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