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COMING OF AGE OR A FALSE DAWN?

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2011 2012 2013 2014 2015 201655.5

66.5

77.5

6.5

7.1

6.5

6 6.1 6.3

6.5

6.36.03

6.29 6.516.8

Bangladesh GDP Growth ComparisonWB IMF

HOW DOES THE FUTURE LOOK LIKE?

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Government

Private

Sector

Taxation Regime

Logistics and Infrastructure Power &

Energy

Policy Support

Investments

International Trade

LIGHTCASTLE BUSINESS CONFIDENCE INDEX

HOW WAS THE INDEX CALCULATED?

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Primary Sector (15%)Jute, Protein & Frozen Food, Tea and Agro-processing

Secondary Sector (40.6%)RMG & Textiles, Pharmaceuticals, Power, Cement, Edible Oil, Steel and FMCG

Tertiary Sector (44.4%)Financial Institutions, High End Hotels, Business Services and Information Technology• 54 Samples from C-Suite

Members

• Surveys conducted from Dhaka, Chittagong and Khulna

• Conducted during June-July 2016

Harmonized Business Confidence Index

Business Confidence = √[(Situation+200) × (Expectations+200) - 200]

BUSINESS CONFIDENCE INDEX 2016

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-100 +100

Overwhelmingly pessimistic

Overwhelmingly Optimistic

0 +39

COMPONENTS OF THE INDEX

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Macro Economy

Industry Status

Firm Performance

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STABLE BUT CAUTIOUS OF UNCERTAINTY

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• Stable political Conditions and decent government policy support • Policy support skewed towards some sectors e.g. RMG and IT• Interest rate decline but still pricy loans

CAUTIOUS BUT OPTIMISTIC IN MAKING INVESTMENTS

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POSITIVE ABOUT EMPLOYMENT GENERATION

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SECTOR BASED FEEDBACK

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Agro-ProcessingTechnology playing a role. Export potential and forward market consolidation opportunity

CementGovernment infrastructure projects sustaining demand. Low prospects of export.

Power Tremendous potential but

But red tapes hindering growth

Financial InstitutionSector recovering but classified

loanand declining interests negatives.

Consumer Durables MAC population growth will lead to Higher demand.

ITESProspects high and augmented by

Government policies.

SECTOR BASED FEEDBACK

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FMCGDemand growing but ‘last mile logistics’ and focus on BOP market key to future growth. High-end HotelsCyclical in nature with bulk coming from Business travel. Recent troubles after terrorist attacks.

Pharmaceutical Growth in domestic market to

be stable. But export can open new doors for growth

Real EstateSector still recovering

through priceCorrections. Lower interest

rates to Spur demand..Leather

Vertical integration and rising costs ofCompetitor.

RMGMoving to high end products key to growth. Competitors’

products getting pricier.

CHALLENGES HINDERING PROGRESS

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SALIENT ONES INCLUDE

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POSITIVE ABOUT EMPLOYMENT GENERATION

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FUTURE DRIVERS OF GROWTH

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©LightCastle Partners 2016

READY CONTENTSPg 20

MANTRA FOR PROGRESS

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• Prioritizing political stability and security

• Facilitating foreign investments in the manufacturing sector

• Incentivizing for export once domestic demand is met

• Increasing rewards and recognition in tax payment

• Connecting academic research to commercial application

THANK YOU!

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