Overview of the September 2024 Economic Seminar
The Embassy of the Republic of Korea in Bangladesh holds quarterly economic seminars for Korean businesspeople, and the September 2024 seminar carried special significance as the first session held after the political upheaval of July and August, including Prime Minister Sheikh Hasina's resignation and the launch of the interim government. Discussions focused on the economic effects of political change, trends in exchange rates, inflation, and foreign exchange reserves, as well as the impact on Korean companies and possible response strategies.
In the second half of 2024, Bangladesh's economy showed resilience by maintaining GDP growth of 5.5% to 6.0% despite political uncertainty. At the same time, falling foreign exchange reserves, which slipped below USD 20 billion, depreciation of the taka to around BDT 117 per dollar, and restrictions on opening import letters of credit had a direct impact on Korean companies operating locally. The embassy emphasized the need to preserve communication channels with the interim government and strengthen corporate support in coordination with KOTRA Dhaka.
Political Changes and Their Economic Impact
Bangladesh's political upheaval in July and August 2024 delivered a short-term shock to the broader economy. Student protests in July calling for quota reform escalated into nationwide disruption, leading to internet shutdowns, curfews, and factory stoppages for two to three weeks. After Prime Minister Hasina resigned on August 5, an interim government led by Dr. Muhammad Yunus took office. The ready-made garment sector saw exports fall 15% to 20% year on year in July and August, but signs of recovery began to appear in September. Korean firms located in export processing zones were relatively less affected, while offices and distribution businesses in Dhaka experienced more direct disruption.
| Indicator | 2024.6 | 2024.7 | 2024.8 | 2024.9 | YoY | Note |
|---|---|---|---|---|---|---|
| GDP Growth (Quarterly) | 5.8% | — | — | 5.5% | 6.0% | Revised downward |
| FX Reserves ($B) | 21.2 | 20.5 | 19.8 | 19.5 | 25.0 | Continuing decline |
| Exchange Rate (BDT/$) | 110 | 112 | 115 | 117 | 109 | Depreciation trend |
| RMG Exports ($B/month) | 4.2 | 3.5 | 3.2 | 4.0 | 4.1 | Decline in Jul-Aug |
| Inflation (%) | 9.7 | 10.2 | 10.5 | 9.9 | 9.4 | Near 10% |
| Remittances ($B/month) | 1.8 | 1.6 | 1.9 | 2.1 | 1.7 | Recovered in Sep |
| FDI ($M/month) | 250 | 180 | 150 | 200 | 300 | Investment slowdown |
Local Issues Facing Korean Companies and Response Measures
The issue discussed most frequently at the September seminar was the restriction on opening import letters of credit and the delays in foreign exchange conversion. Bangladesh Bank, in an effort to defend reserves, limited non-essential import LCs and prioritized dollar allocation for energy and food imports. As a result, Korean companies reported delays in importing raw materials and equipment, while profit remittances to headquarters in Korea were in some cases delayed by three to six months. Through meetings with deputy governors at Bangladesh Bank, the embassy requested priority treatment for Korean firms seeking LC approvals, and separate foreign exchange allocations were secured for companies located in EPZs. KOTRA Dhaka also circulated updates on LC issuance conditions by local bank and alternative payment methods such as escrow and sight L/C.
Second-Half Outlook and Corporate Strategy
The September 2024 embassy economic seminar provided a comprehensive discussion of how Korean companies should respond on the ground amid political disruption. Short-term risks remain, including lower reserves, LC restrictions, and delayed remittances, but Bangladesh's structural growth drivers, including a population of 170 million, an expanding middle class, and ongoing digital transformation, remain intact. With the interim government pursuing reforms and continued support from international partners, economic normalization is expected to begin in 2025. Companies that use this period to strengthen local networks and business foundations are likely to be in the strongest position once the environment stabilizes.