Recession can hurt Bangladesh’s export diversification as nearly 16 per cent of the country’s exports consist of non-readymade garment products. If there is a recession many companies in the Middle East would be out of business in which a good number of Bangladesh workers are employed. These workers can lose their jobs, having an adverse impact on the country’s remittances. Bangladesh has already witnessed double-digit growth during the July-May period of the current fiscal year. The recent slowdown in the US economy, dismal German economic performances, lowest ever industrial production growth in China in recent times, and a contraction in the economies of Argentina, South Africa and Iran are warning signs of a possible global economic meltdown.
Though Bangladesh is getting some benefits from the US-China trade war, economic diversification can help Bangladesh avoid the impact of a possible economic recession. However such diversification needs investments. Value addition is one way out and being sustainable is another. The country has to take initiatives to capture more low-end apparel manufacturing relocation from China. Bangladesh exports low-end garment products. Apparel exports contribute 84 per cent to the country’s total export earnings.