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Brexit uncertainty poses risk for BD economy

WB forecasts 7.3pc growth in FY ‘19


FE Report | Published: June 10, 2019 09:34:54 | Updated: June 14, 2019 12:12:07


Reuters file photo

The Brexit uncertainty poses a "risk" to South Asian economies including Bangladesh due to having generalised system of preferences (GSP) with the European Union (EU) and a significant export to the United Kingdom.

The World Bank (WB) issued the warning in its latest report titled "Global Economic Prospects: Heightened Tensions, Subdued Investment" released last week.

"A no deal Brexit could have a significant impact on exports of those countries to the UK in the absence of new trade agreements," said the WB report.

The report showed Bangladesh's exports to the UK as a share of total shipment fell to 10.2 per cent in 2018 as against 10.9 per cent in 2017.

Since fiscal year 2014, Bangladesh has been a top beneficiary of preferential trade agreement in the UK and the EU among four south Asian economies, such as India, Sri Lanka and Pakistan.

In the meantime the report has revised upwards Bangladesh's annual economic growth to average 7.3 per cent this fiscal.

Activity will be underpinned by strong infrastructure spending and solid private investment with some easing of infrastructure constraints.

Slowing activity in major trade partners' economies, such as the Unites States and the Euro area will constrain the contribution of net exports to growth in the next fiscal year, the report predicted.

jasimharoon@yahoo.com

 

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