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Bangladesh may get a hit if uncertainty persists further

As Britons voted to leave the European Union, Bangladesh runs the risk of losing duty benefits on its annual exports of more than $3 billion to the UK.

Apart from exports to the UK, remittance income from the European country may come under strain as an impact of its departure from the EU. In the long run, Bangladesh's economy might take a hit if the current uncertainty in the global economy persists further.

According to Zahid, lead economist of the World Bank in Dhaka, the devaluation of the pound may have an immediate impact on Bangladesh's exports and remittance. However, the devaluation resulted from an overreaction which would cool down soon.

The UK is Bangladesh's third largest export destination after the US and Germany, and the second largest in Europe.

Bangladesh exported goods worth $3.23 billion to the UK in 2014-15, registering a 21.28 percent growth from the previous year, according to the Export Promotion Bureau (EPB). Garments make up nearly 90 per cent of the export figure.

As Britain chose to leave the EU, economists and exporters said it would be a major challenge for Bangladesh to retain duty-free trade privilege of its goods to the UK.

Because of Brexit, the whole EU as well as the UK would face an economic crisis. As a result, people would buy less and the exporting countries would feel the pinch, said Faruque Hassan, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

 
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