· Bangladesh has been growing more than 6% since 2011, and agricultural production, remittances to overseas workers, domestic consumption and new investment are also on the rise.
- Manufacturing was very poor except for the clothing industry, but the recent rapid growth of home appliances/transmission machines/drugs, etc.
- The IMF expects growth of more than 7.1 percent in 2019 following Bangladesh's 7.2 percent growth in 2016, 7.6 percent in 2017 and 7.7 percent in 2018.

· Bangladesh has achieved an annual average of 7.4% over 16% economic growth according to the 7th Five-Year Plan (2016-20), and is suitable for urbanization and sustainable environment considering the 2nd poor.
Economic growth is being driven by four major tasks: economic growth for economic growth, a substantial decrease in the ratio of the three poor (24.8%→18.6%) and the extremely poor (12.9%88.9%), and employment of all available labor.
- Also, the major macroeconomic goals are real economic growth (6.5% →8%), inflation (6.5 → 5.5%), investment to GDP (28.9 → 34.3%), FDI to GDP (0.8% →3.0%), exports (31.7 billion → 54.1 billion).
Set the ratio of trade to GDP (42.97→50%) and the proportion of sectors in the economy (28%→33%, service sector 56.4%→54.1%, agriculture 15.6%→12.9%).

Key Economic Indicator
· Domestic economy
- GDP: $287.6 billion (2018, IMF)
- Real economic growth rate: 7.7% (2018, IMF)

※ Annual growth rate of more than 6% over the past 10 years
- GDP per capita: $1,744 (2018, IMF)
- Inflation: 5.4% (2018, IMF)

· External economy
- Total export: $36.2 billion / Total revenue: $54.5 billion (2017/18, Bangladesh Central Bank)
- Current account: - $8 billion (2018, IMF)
- Foreign exchange reserves: $31.3 billion (2019.5, Bangladesh Central Bank)
- Transfer of foreign exchange to Korea by overseas workers: $14.9 billion (2018, Bangladesh Central Bank)
- Exchange rate: US$1 = BDT 84.5 (2019.5, Bangladesh Central Bank)
- External Liabilities: $33.1 billion (based on CIA standards, June 2018)

A. Status by major sectors
(1) Gross domestic product (GDP)
· Bangladesh's GDP has grown more than 6% since 2011, but it has continued to grow around 7% since 2016, and is expected to maintain the 7% economic growth rate in 2019.

(2) Inflationary rate
· Inflation rate of more than 11% in 2011 has caused concern, but it has stabilized since 2012 and has remained in the 5% range since 2016.
- The easing of inflation was mainly due to slowing food prices and the central bank's strict monetary policy, but raised inflation concerns due to the recent rise in food prices.

(3) Interest rate
· Bangladesh's central bank has continued to cut interest rates since 2015 to promote corporate production activities, maintaining 6% since April 2018.
- Keep the benchmark interest rate at 7.25% until the end of December 2015 before lowering the benchmark interest rate by 0.5% point to 6.75% in January 2016 and readjusting it to 6% in April 2018
- However, even though average lending rates are falling due to poor loan conditions, much higher interest rates than average are applied to small and medium-sized enterprises with insufficient collateral capacity.

(4) Exchange rate
· The taka currency fell to 81.9 taka per dollar in 2012 due to sluggish exports, but has since risen to 78.1 taka per dollar in 2013 thanks to a recovery in exports, slowing imports due to weak investment, and increasing remittances from overseas workers.
- The taka has been on the decline again since the second half of 2015 due to the widening trade deficit, and has been on a sharp decline since 2017, falling to 84.5 taka per dollar recently.

(5) Unemployment and minimum wage
· According to the National Statistical Office of the host country, the unemployment rate for the whole of 2018
- According to the ILO and other surveys, about 57% of all jobs are vulnerable in terms of job security, working environment, and wages.
· Since the Minimum Wage Commission was introduced in 2010, Bangladesh's largest industry, the minimum monthly minimum wage for the clothing industry, has been maintained at 3,000 takas per month based on the lowest level of proficiency, but increased 77 percent in November 2013 to 5,300 takas per month and re-increased to 8,000 takas per month.

(6) Balance of payments
· According to the central bank of Bangladesh, both exports and imports increased in fiscal 2017/18 but the trade balance worsened compared to the previous fiscal year ($18 billion deficit).
- In the case of exports, the good performance of leather, leather goods and footwear continues to drive the overall increase.
- Imports increased by 25.2%, and imports of consumer goods were affected by increased investment and increased purchasing power.

· The inflow of remittances from overseas workers was $12.7 billion in fiscal 2016/17 due to a slowdown in the construction industry in the Middle East, but it recovered again in 2017/18 and recorded $14.9 billion.
· Overseas aid continues to expand. In fiscal year 2005/06, annual aid (expenditure) was $15.6 billion a year, but since 2014/15 it has doubled to $3 billion a year.
- In 2016/17 the amount of aid recorded was 3.5 billion dollars, but the ratio of expenditure to the contract was about 50 percent due to delays in the project due to local political instability and corruption.

B. Status by industry
(1) Bangladesh Industrial Structure
· Bangladesh is gradually shifting away from the traditional agricultural-oriented industrial structure and into an industrial-oriented one, but so far the clothing industry has taken up a significant portion.
· In terms of GDP per industry, agriculture, forestry and fisheries, which reached 55% in 1970, were reduced to 14.23% as of fiscal 2017/18 and accounted for 33.66% of manufacturing and 52.11% of service industries.
- However, 40% of the workforce is engaged in agriculture and 20% in manufacturing
· Manufacturing relies on imports for most capital goods due to lack of basic industries, the clothing industry accounts for 84% of total exports, and other major export items include medicines, frozen fish, yellow horses, tea, leather, etc.

(2) Major industrial trends
(A) The clothing industry
· Bangladesh's clothing industry developed in the early 1980s when Sri Lanka, the largest clothing exporter to the U.S. and European markets, became an alternative supplier as the situation became unstable.
- The number of sewing factories increased from only 180 in 1983 to 4,560 as of 2017.
· The clothing industry accounted for 84% of total exports by exporting $22.5 billion in fiscal 2017/18 and grew into a key national industry with 4 million employees and 20 million people directly or indirectly connected.
- More than 90 percent of clothing industry exports are concentrated in the U.S. and Europe

(b) the leather and footwear industries.
· It is expected to grow into the second-largest export industry after the apparel industry, and it exported $700 million in fiscal 2017/18 to account for 2.7 percent of total exports.
- Raw skin and leather sourced locally are processed using low-wage labor and exported to developed countries at low and medium-priced prices. Generalized System of Preferences (GSP) benefits when exporting to the EU

(C) Fish processing industry
· Bangladesh's frozen fish processing industry, which is dominated by shrimp processing, exported about $500 million in fiscal 2017/18, accounting for 1.9% of total exports.
- Most exports to European markets, such as Belgium.

(D) Jute Industries
· As one of the traditional industries, yellow horse yarn and processed products exported $700 million in fiscal year 2017/18 to account for 3.4% of total exports.

(E) The pharmaceutical industry
· 97% of the domestic market is procured from locally produced medicines, and the top 10 pharmaceutical companies out of 200 local pharmaceutical companies occupy more than 70% of the domestic market, and the amount of new investment reported is $80 million, along with the recent annual growth of more than 10%
- Exports of $120 billion as of fiscal 2017/18, accounting for 0.5% of total exports.

A. Overall investment environment
· Bangladesh is one of the lowest wage countries in Asia, and low-wage countries such as Bangladesh are in the spotlight as new production bases to replace China as business conditions have deteriorated overall, with labor costs in China rising sharply and labor laws tightening.
· The EU, Canada, Australia, etc. are granting GSP benefits and treatment benefits to the poorest countries in Bangladesh, and tax benefits to companies that move into the Export Processing Zone.
· Considering the world's 8th largest population of 160 million, the high economic growth rate (maintenance of 7% in recent years), and the increase in disposable income, the domestic market has potential for development in the mid- to long-term, and local conglomerates are expanding their investment in new manufacturing industries.

B. Investment Policy
(1) Overview of Foreign Investment
· Bangladesh enacted the Foreign Investment-Promotion & Protection Act (Foreign Private Investment & Protection Act), which focuses on boosting foreign investment and protecting investment companies, in 1980 and announced new industrial policies in 1999 to actively attract foreign capital to expand incentives for foreign investors and ease foreign exchange regulations.
· Foreign direct investment in fiscal year 2017/18 is estimated at $2.6 billion, with China (560 million dollars), the UK (370 million dollars), Hong Kong, the United States, Singapore, and other major investors mainly investing in power, textile sewing and finance.

(2) Export Processing Zone (EPZ)
· The Export Processing Corporation (EPZ) was first established in the port city of Chittagong in 1983 under the Bangladesh Export Processing Zone Act (Bangladesh EPZ Act), which was enacted in 1980, and since then, Dhaka in 1993, Montagl in 1997, Kumila in 2000, and Yshadira in 2001 respectively.
- In 1996, the "Bangladesh Private Export Processing Zone Act" was enacted, allowing private companies to establish EPZs and investing in KEPZ (Korean EPZ) in Korea's "eternal trade"
· Companies operating in EPZ are given incentives such as exemption from corporate and interest income taxes on borrowed capital for 10 years, exemption from double taxation under a bilateral agreement, duty-free import of raw materials for construction of machinery, equipment, raw materials, vehicles, and factory buildings, and duty-free export of manufactured products. In particular, foreign investment is guaranteed by law and the amount of investment is unlimited, and profits and the original investment can be withdrawn.
· In the case of Chitagong and Dhaka EPZ, the government of Bangladesh built additional EPZs such as Karnapuli EPZ (Chitagong) and Adamji EPZ (Daka) in Dhaka and Chitagong areas after the entry was already completed but four other EPZs failed to attract domestic and foreign investment.

(3) Foreign exchange policy
· 1994.3.24. As the TK of Bangladesh is announced to be convertible into all foreign transactions under the agreement with the IMF, the foreign exchange transaction handling bank can reimburse foreign trade settlement and foreign currency borrowing without approval from the central bank.
· The Takah currency has declined since 2015 due to the widening trade deficit.

· Bangladesh strictly controls the overseas transfer of foreign currency by its citizens, so cash remittances (T/T) to foreign countries are not allowed if there is no U.S. dollar account, and all foreign trade transactions are made in principle by L/C transactions, and companies can operate foreign currency accounts in local currency (only EPZ can operate foreign currency accounts).

(4) Tax policy
· According to the 2018/19 fiscal year budget, total revenue is $43.2 billion and tax revenue is $39 billion, accounting for more than 90% of the tax revenue.
- National Tax Service (NBR) tax revenue ($37.7 billion): 37.2% of the imposition tax, 10.9% of import duties, 34% of income tax, 16.4% of special tax, and 1.21% of other taxes.
- Non-national tax revenue (1.2 billion dollars): Tobacco and liquor taxes (1.04 percent), automobile taxes (14.69 percent), land taxes (14.39 percent), stamp taxes (64.79 percent), etc.
- Overseas aid increased 6.28% year-on-year to $8.2 billion, and overseas borrowing increased 20% year-on-year to 2.1% (6.3 billion)
· Indirect taxes, such as levying taxes and tariffs, account for 58% of the revenue, and the proportion of direct taxes is 29.6% of the total tax revenue.
· In the case of tax administration, tariffs are computerized by introducing a system called AYSCUD++, but overall tax administration, such as issuing and collecting tax notices, is not computerized.

A. Overview
· Bangladesh relies on imports for most consumer goods, raw materials and machinery, and oil, resulting in a chronic trade deficit.
· The Bangladesh government is pushing to curb imports of locally produced items, luxury goods, etc., regulate foreign exchange, and expand exports by fostering strategic industries other than the clothing industry.

B. Major Import and Export Countries
· As most of the clothing, the largest export item, is exported to Europe and North America, most of the countries in the region are also located in the top export countries.




· Bangladesh's largest importer is China, accounting for 23 percent of Bangladesh's total imports, focusing on machinery, cotton yarn, cotton fibers, electrical and electronic products.

Bangladesh's main import destination

*Data: Bangladesh Central Bank

C. Export Management
· Related systems and regulations
- The Commerce Department establishes and implements export policies every 2-3 years.
- Participating in and holding overseas exhibitions at the EPB (Export Promotion Bureau), dispatching envoys, export subsidies, and implementing export promotion policies such as tariff-free import of raw materials and machinery for export.
- The Treasury Department is operating Tax Holiday and various export subsidy policies
- Operation of the Export Promotion Fund (EPF), simplification of export procedures, and other tax and financial benefits

· GSP Benefits
- No tax on Bangladesh products: EU, Australia, Canada, Japan, etc.
- Some products are free from tariffs in Korea, China, etc.

D. Import Management
· Related systems and regulations
- The Commerce Department announces the Import Policy Order every three to five years based on the annual foreign exchange operation plan prepared by the Ministry of Finance and the details of foreign exchange financial allocation by expenditure.
- In addition to the basic duties of the CD (Customs Duty), the Luxury Tax Supplementary Duty (SD), Value Added Tax (VAT), the Pre-Income Tax (AIT), the Regulatory Tax (RD), and the Pre-Value Tax (Advanced Income Tax), the Pre-Value Tax (Advanced Tax) are usually added separately, so 6 items are required.

· Import regulation item
- Some products (such as agricultural machinery) that need to be protected by domestic producers among chemical and textile industries, such as products and environment that violate certain religious reasons or customs, are designated and operated as prohibited items.

· Other
- As an Islamic country, import ban on Israeli origin or Israeli-flagged shelf shipments

A. Multilateral Regional Agreement
(1) South Asia Free Trade Agreement (SAFTA)
· Effective Period: July 1, 2006
· Participating countries: India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives, Afghanistan
· Reduction of tariffs and recognition of exceptions
- Non-poor countries (India, Sri Lanka, Pakistan): Tariff cuts to 0-5% within 2012
- The poorest countries ( Bangladesh, Nepal, Bhutan and Maldives): 0-5% tariff reduction within 2015
- Recognize exceptions by country: 300 to 1,300 items (announced by country)
· Regulations of origin and compensation for least developed countries
- Non-poor countries: 40% or more of the value-added goods in their countries are recognized as their origin.
- The poorest country: Recognize more than 30% of the value-added goods in the country as their country of origin.
- If the portion of the region is more than 50 percent and the value added in the country is more than 20 percent, the country shall be recognized as the origin of the country concerned, and the reduction of tax revenues in the least developed countries due to the reduction of tariffs shall be compensated.
· Korea will apply for observer status in July 2006 and officially participate from April 2007

(2) Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Co-operation, BIMSTEC
· Composition period: Thailand-led in 1995, sponsored by ADB and ESCAP, and launched as Forum in 1997
· Participating countries: Thailand, Bangladesh, India, Myanmar, Sri Lanka, Nepal, Bhutan
· The BIMSTEC Free Trade Agreement (BFTAFA) was signed by six countries except Bangladesh, and a negotiation committee was established and agreed to conclude an FTA between the countries by 2017, but as of May 2019, negotiations are still underway.
- Bangladesh calls for compensation for the poorest developing countries.

(3) Asia Pacific Trade Agreement, APTA (Asia Pacific Trade Agreement)
· Time of entry into force: A preferential trade agreement signed in 1975, effective from June 1976.
· Participating countries: Korea, India, Sri Lanka, Bangladesh, Laos
- Laos has been suspended from member states since its communistization because it has not deposited its concession tickets, and China has joined since 2003.
· Korea provides partial tariff reduction or exemption on a total of 197 items including coconut and coffee, tea, cocoa, graphite, dye, insecticide, natural rubber and rubber products, leather, paper, yellow horse, silk, textile history, and some clothing and ceramic products.
· Under the second agreement in 2005, Korea agreed to grant permits to Bangladesh for 291 items and Bangladesh for 209 items for Korean products (in effect in 2007).
- Despite the effectuation of the agreement, Korea actually receives tariff benefits for exporting to Bangladesh via APTA.

(4) Preferential tariffs on least developed countries
· The measure is intended to implement the agreement reached by the Hong Kong Cabinet of the World Trade Organization (WTO) in December 2005 and the Declaration of the Korea Initiative for African Development by our leaders in March 2006, effective in January 2008.
· Target countries: 50 least developed countries, including Bangladesh, set by the UN in 2007.
· Major cooperative matters
- The plan is to expand the scope of tax-free benefits for the least developed countries annually. In 2010, 4,294 items, 85% of the taxable items (HS Code 6 units), will be tax-free.
- The number of tariff-free items in the poorest countries totaled 4,547 in 2011, 90% of Korea's total tariff-free items.
- 253 items (12 manufactured goods, 241 agricultural and fisheries products) were added in 2012, a total of 5,052 items were applied and maintained after 95% application.
- Preferential tariffs (LDCs) in the least developed countries will be maintained until 2027. (The city of Bangladesh is scheduled to graduate from the poorest country in 2024, and a grace period of three years will be provided.)

B. bilateral agreement
· Bangladesh has discussed bilateral FTA negotiations with India, Pakistan, Malaysia, Singapore, and China, but no specific progress has been made.