BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

THE GLOBAL ECONOMIC CRISIS: IMPLICATIONS FOR BANGLADESH

Author: A.K.M. Atiqur Rahman

DOI Link: https://www.doi.org/10.56888/BIISSj2009v30n2a2

ABSTRACT

The current global economic meltdown that is originated from the financial crisis in the US has now spread worldwide through a number of transmission channels. Bangladesh was virtually immune from the global financial crisis as our financial market is least integrated with the rest of the world. However, as thé economy of Bangladesh has proceeded a long way in terms of globalization, any development in the world economy has important implications for the real side of the economy. The paper makes an attempt to analyze the implications of the global crisis for Bangladesh. As more than ninety per cent of Bangladesh’s export is directed to the developed countries, recession in the developed world has negative implications for the country’s export. Export from Bangladesh has already started to decelerate and export of most of the items excluding RMG started to decline. Number of persons left for overseas employment started to decline significantly and remittances inflow started to decelerate. Global recession had also implications for government revenue collection, particularly from trade related taxes as import is showing a very slow performance. The crisis would have some indirect impact on a few other areas of the economy as well. However, there is some development in the world market that has some offsetting affect of the crisis on the overall macroeconomic balance of the country, including inflation. Although the economy of Bangladesh is not hurt that much yet, it could be hurt more severely in the days to come if the global recession prolongs. Hence, appropriate policies to mitigate the negative impact of the crisis deserve serious consideration.