Global Research

At a Glance

Bangladesh – A compelling
growth story
28 September 2021
Saurav Anand
+91 22 6115 8845
Saurav.Anand@sc.com
Economist, South Asia
Standard Chartered Bank, India

If you are in scope for MiFID II and want to opt out of our Research services, please contact us.

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Bangladesh – A resilient rebound

▪ We forecast GDP growth at 7.2% in FY22* (FY21: 5.5%; FY16-FY19 average: 7.6%), driven by an export demand recovery,
strong remittance inflows and public investment
Accelerating ▪ Fiscal and monetary policies to remain accommodative; we see FY22 fiscal deficit in line with budgeted target of 6.2% of GDP
after a speed
bump ▪ Bangladesh Bank to maintain accommodative stance, with policy rates on hold; we see FY22 CPI inflation at 5.6%
▪ Slower pace of vaccinations is a risk; c.60% of the total population will be fully vaccinated only by June 2022 at the curren t rate
▪ Broader recovery is likely to lead to a larger C/A deficit, but the BDT should remain stable, as FX reserves remain comfortab le

▪ We expect growth to be sustained at over 7% from FY22-26, as structural drivers remain intact
▪ We expect GDP to exceed USD 500bn in FY26 (FY21: USD 355bn) and per capita GDP to reach c.USD 3,000 (FY21: 2,227)
Medium-term
structural ▪ Favourable demographics, lower wages, rising urbanisation and digitisation will propel growth, in our view
drivers remain
▪ Productivity gains through technology adoption, technology inclusiveness through mobile-based solutions and the ITES sector
intact
are significant opportunities
▪ Lower corporate taxes and tax holidays for investment in focus sectors could spur private investment and higher FDI

▪ Graduation to a middle-income country to create long-term challenges as tariffs are phased out starting 2026
Policy support is
a prerequisite ▪ Proactive bilateral trade deal negotiation necessary to offset tariff hikes; tariff hikes to lead to a c.14% export loss (per WTO)
for a smooth
transition to ▪ Reliance on low labour cost to maintain a competitive edge could become increasingly untenable
middle-income ▪ Trade and investment, and an integrated framework of development need to become policy priorities; execution remains key
status
▪ Improved infrastructure, lowering cost of trade and better governance essential to improve ease and cost of doing business

2 *Bangladesh’s fiscal year ends in June; Source: Standard Chartered research

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Key forecasts

FY19 FY20 FY21 FY22F* FY23F

Real GDP growth (%) 8.1 3.5 5.5 7.2 7.3

Inflation (%) 5.5 5.7 5.6 5.6 5.5

Fiscal balance (% of GDP) -5.5 -5.5 -6.1 -6.2 -5.0

Remittances (USD bn) 16.4 18.2 24.7 23.0 24.0

Current account (% of GDP) -1.8 -1.6 -1.0 -2.0 -2.0

Policy rate – repo (%) 6.0 4.75 4.75 4.75 4.75

USD-BDT** 85.0 85.0 86.0 87.0 88.0

3 *Bangladesh’s fiscal year ends in June; **Forecasts are for December of previous fiscal year; Source: Standard Chartered research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Bangladesh – Economic factsheet

Nominal GDP USD 355bn (FY21F*) Share of GDP by sector

GDP per capita USD 2227 (FY21)/ USD 4964 (PPP basis) FY21 (%)
GDP growth, y/y 7.2% (FY22F SCB forecast)
Services, 51.5%
Unemployment rate 4.15%

Public debt to GDP ratio 39.0% (FY21F)

FX reserves USD 48bn (9 months of import cover as of Aug-2021)

Inflation 5.6% (FY21)

Policy rate 4.75% Agriculture, 13.5% Manufacturing,

Monetary policy objective Managing inflation while remaining growth-supportive 35%

Headline inflation target 5.3% (FY22)

Population 167.5 Share of GDP by expenditure

Median age 26 years FY21 (%)**
80 69.1
Labour force participation rate 59.0%
70
Literacy rate 73.9% 60
50
Private consumption (% of GDP) 63.2%
40 32
Government consumption (% of GDP) 5.9% 30
20
Investment (% of GDP) 32.0% 10 -2.7
Exports of goods (% of GDP) 11.2% (FY21) 0
-10
Imports of goods (% of GDP) 13.9% (FY21) Consumption Investments Net exports

*Year ended June 2021, **Does not include discrepancies

4 Source: Bloomberg, CEIC, World Bank, Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Strong growth recovery to resume
after a brief hiatus

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Growth slowed across sectors due to COVID

COVID-19 impacted growth in FY20 and FY21

GDP growth by sector, % y/y
16% FY17-FY19 (average) FY20 FY21
14%

12%

10%

8%

6%

4%

2%

0%
GDP

Hotels
Trade
Services
Industry

Financial
Agri

Real estate
Transport
Construction
Manufacturing: Small
o/w Manufacturing: Large

6 Source: CEIC, Standard Chartered Research

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Economic activity to recover from FY22 onwards

GDP growth, % y/y

8.0

Frequent nationwide
MFA* phase-out Domestic political pre-election
7.0 (2004) crisis (2006-08) shutdowns (2014)
Asian financial
crisis (1997-98) Cyclonic
6.0 storm (1999)

No significant
political disruptions
5.0 since March 2015

Slower growth
4.0 after 9/11 (2001) BoP crisis (2011-12)

COVID-19 pandemic
3.0
FY97

FY00

FY03

FY06

FY19
FY98
FY99

FY01
FY02

FY04
FY05

FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17

FY20

FY22 (F)
FY21 (F)

FY23 (F)
FY18
Bangladesh’s economy is likely to surpass USD 500bn by 2025 (2021F: USD 355bn)

7 *MFA = Multi-Fibre Agreement; Source: World Bank, Bangladesh Bank, CEIC, Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Exports and remittances to lead the potential recovery in FY22

A sharp pick-up in imports indicates normalisation Key export and remittance destinations are
of economic activity (% y/y, 12mma) witnessing a strong growth recovery (% of total)
70%
50%
60%
30% Exports 50%
40%
10% 30%
20%
-10% 10%
Imports
0%
-30%
Europe US Middle East Europe US
Jul-08

Jul-09

Jul-10

Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21
Exports Remittances

Remittance growth has surprised positively, but Capacity utilisation has improved sharply
could moderate going forward (Capacity utilisation by factory size*)
45% 3.0 100%
35% 2.5
Remittances (% 80%
25% y/y,12mma) - LHS 2.0
60%
15% 1.5
40% Medium
5% 1.0 Small Large
20%
-5% Remittances 0.5
(USD bn) - RHS 0%
-15% 0.0
Aug-09 Aug-11 Aug-13 Aug-15 Aug-17 Aug-19 Aug-21 Apr-20 Jun-20 Sep-20 Dec-20

*based on a survey of 610 readymade garment factories conducted by the Centre for Entrepreneurship Development and published by the Centre for Policy
8 Dialogue; Source: World Bank, CEIC, Standard Chartered Research estimates
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Fiscal and monetary policies are supportive

Fiscal deficit to widen in FY22 on higher Non-food inflation is driving CPI higher
expenditure (% of GDP) % y/y
0.0 10

-1.0 9

8 Food
-2.0

7
-3.0
Headline
6
-4.0

5
-5.0

4
-6.0
3 Non-food

-7.0
FY21F

FY22F
FY14

FY17
FY12

FY13

FY15

FY16

FY18

FY19

FY20

2
Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21

9 Source: Bangladesh Bank, CEIC, Standard Chartered Research estimates

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Lower interest rates to boost economic activity

Policy rates have gradually declined as inflation Higher liquidity has helped keep interest rates
has slowed (%) low (%)
10
10%
5Y bond yield
9 9%

8 8%

7%
7 Repo rate CPI inflation
(y/y)
6%
6
Reverse repo 5%
5
4%

4
3% Overnight call
money rate
3 2%

2 1%
Jun-11 Jun-13 Jun-15 Jun-17 Jun-19 Jun-21 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21

10 Source: Bangladesh Bank, CEIC, Standard Chartered Research

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Broader growth recovery to widen C/A deficit; FX reserves to stay comfortable

C/A balance to return to deficit in FY22 as trade FX reserves remain comfortable

deficit widens (% of GDP) USD bn (LHS), months of import cover (RHS)
10 3 60 10

8 9
2 50
6 8

4 1 7
40 Months of
import cover 6
2 (RHS)
Remittances 0

0 30 5

-1
-2 Trade def 4

20
-4 3
Net services -2
FX
reserves (LHS) 2
-6
Others 10
-3
-8 1
C/A balance
-10 (RHS) -4 0 0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22F FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22F

11 Source: CEIC, Standard Chartered Research estimates

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
However, the expected recovery may continue to be uneven

Private-sector credit growth has slowed to a 10- Bad loans could spike once regulatory
year low (% y/y) forbearance is removed (GNPAs, % of total loans)
35% 40

35
30%

30 Nationalised
25% banks

25
20% Private

20

15%
15
Total
10% Total*
10

5%
5
Private and
foreign banks
0% 0
Jul-09 Jul-11 Jul-13 Jul-15 Jul-17 Jul-19 Jul-21 Jun-05 Jun-07 Jun-09 Jun-11 Jun-13 Jun-15 Jun-17 Jun-19 Jun-21

*Total credit growth includes government borrowing from banks via government securities, which increased sharply in FY20;
12 Source: Bangladesh Bank, CEIC, Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Consumption-led growth recovery faces risks from a slow vaccination pace

Growth to rebound in FY22, led by consumption New infections slowed in September

GDP growth, ppt contribution New cases, ’000 (LHS); deaths (RHS), 7-day MA
12% Private consumption 18 300
15 250
Govt consumption
12 200
10% Investment GDP*
9 150
Net exports 6 New infections 100
8% (LHS)
3 50
Deaths (RHS)
0 0
6% Apr-20 Jun-20 Sep-20 Nov-20 Feb-21 Apr-21 Jul-21 Sep-21

4% Vaccination pace needs to pick up sharply

% of total population fully vaccinated
2% 60%
50% 9.9% of the population was fully
0% 40% vaccinated as of 26 Sep; another
5% partially vaccinated
30%
Proportion of population
-2% 20% fully vaccinated at the
10% pace of last 30 days

-4% 0%
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21F FY22F Jan-21 Apr-21 Jun-21 Aug-21 Oct-21 Dec-21 Feb-22 Apr-22 Jun-22

* Discrepancies are not shown separately and were positive contributors to GDP growth in FY19-FY21;
13 Source: CEIC, Standard Chartered Research estimates
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Medium-term growth drivers are
intact

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Bangladesh on track to become a USD 500bn economy by 2025

Bangladesh to remain a growth outperformer Bangladesh has gained global GDP share in the
GDP growth rates (%), Bangladesh vs India and past decade
Vietnam* GDP, USD bn (LHS), % of global GDP (RHS)
Bangladesh 600 0.50%
8% Vietnam
Vietnam is close to Bangladesh in terms of
0.45%
GDP size
7%
500
India 0.40%
6%
0.35%
400
5%
0.30%
4%
300 0.25%

3%
BD as % of 0.20%
global GDP
2% 200
0.15%

1% Bangladesh 0.10%
100
0% 0.05%
VN
2022-2025F
1981-1990

1991-2000

2001-2010

2011-2015

2016-2018

2019-2021

0 0.00%
1981 1991 2001 2011 2021F 2026F

15 *2022-25 forecasts are based on IMF estimates; Source: IMF, CEIC, Standard Chartered Research 15
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Bangladesh’s per-capita income is now similar to India’s

Bangladesh’s growth has seen a sharp Per-capita income is similar to India’s and has
improvement in the past two decades grown at a robust pace in the past decade
Per-capita GDP growth rates Nominal GDP per capita (USD)
6,000
1981-90 1991-2000 2001-10 2011-18 2019-21

Bangladesh 2.4% 2.2% 7.1% 9.4% 7.8% 5,000 Nominal GDP per capita is likely to exceed
USD 3,000 by 2026

China 1.8% 10.3% 15.7% 7.0% 6.9%

4,000
India 3.2% 3.8% 11.7% 3.9% 3.1%

Indonesia 0.4% 0.3% 14.3% 0.6% 2.5% 3,000

Korea 13.3% 4.7% 7.0% 3.4% 1.4%

Vietnam
2,000
Malaysia 3.0% 4.2% 8.0% 0.8% 1.6% India

Sri Lanka 5.1% 5.7% 11.1% 3.0% -1.9% Bangladesh

1,000

Thailand 7.6% 1.3% 10.4% 3.2% 1.8%

0
Vietnam -9.0% 13.5% 12.1% 6.6% 4.0%
1981 1991 2001 2011 2021 2026F
Source: IMF, CEIC, Standard Chartered Research

Bangladesh’s nominal GDP per capita is ahead of India’s on strong growth and stable FX in the past five years

16 16
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Economy remains largely oriented towards domestic consumption

Consumption still the main contributor to GDP, Exports and remittances – critical to consumption –
but the role of investment is increasing have been resilient in FY21 (% of GDP)
GDP composition by expenditure
32% 68%
Private consumption Govt consumption
Private investments Govt investments
110% Net exports Discrepancies 67%
5.0% 6.6% 27%
7.9% 8.5% 9.1% 9.1% Household consumption
(RHS) 66%
90%
22.2% Remittances
24.0%
25.0% 25.2% 24.1% 22.7% 22% 65%
5.2%
70% 5.1%
5.4% 5.7% 5.9% 5.9% 64%
17%

50% 63%

12% Exports of 62%

71.6% 67.3% 63.7% 63.4% 63.2% goods and
30% 62.4%
services
61%
7%
10% 60%

-4.6% -3.7% -3.4% -3.4% -4.1% -2.7%

2% 59%
-10% FY11-15 FY16-18 FY19 FY21
FY06-10 FY11-FY15 FY16-FY18 FY19 FY20 FY21 (average) (average)

17 Source: World Bank, ADB, CEIC, Standard Chartered Research estimates 17

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Demographics and urbanisation prospects are positive

Working-age population is likely to increase in Rising urbanisation could lift long-term growth
the next decade (working-age population, % of total) potential
75 110
The UN projects that Bangladesh’s urbanisation rate
will approach 60% by 2050
100
Singapore

90 Chile
70 Brazil

80
Malaysia

Urbanisation rate (%)

70
65

60 China
Indonesia
50 Nigeria Thailand
60 Philippines
India
40
China Bangladesh Vietnam
India
30
Sri Lanka
55
Bangladesh 20

10
50 2.5 3.0 3.5 4.0 4.5 5.0
1950 1975 2000 2025 2050 2075 2100 Log GDP per capita (USD)

18 Source: World Bank, UNCTAD, Standard Chartered Research estimates 18

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Lower wages and rising productivity add to demographic advantages

Bangladesh’s wages are among the lowest in Real wages declined from 2010-19, while
Asia (gross monthly minimum wage levels, 2019) productivity improved in line with peers
450 Min wages in USD 2019 Min wages in PPP 2019 14% Real min wage growth (2010-2019)
Productivity growth (2010-2019)
400 12% 11.3%
388

353 10%
350 331
8%
6.9% 6.8%
300 5.8% 6.0%
6% 5.5%
388
247 4.0% 4.0%
250 3.9%
4%
215 217

200 2%

0%
150
127
111 -2%
100
65 70 -4%
48 -4.5%
50
-6%
18 -5.9%

0 -8%
Bangladesh India Sri Lanka Indonesia China Vietnam Bangladesh India Sri Lanka Indonesia China Vietnam

19 Source: ILO Global Wage Report 2020-2021, Standard Chartered Research estimates 19
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
 Increased digitisation should boost medium-term productivity

Exponential increase in mobile subscriber base Online payments have surged in a pandemic year
Mobile subscribers (mn), mobile density (%)
200 Mobile subscribers Mobile density (%,RHS) 120 45
Online payments (BDT bn)
Millions

180 40
160 100
35
140 80 30
120
100 60 25
80 20
60 40 15
40 20 10
20 5
0 0
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2016 2017 2018 2019 2020

▪ Bangladesh ranked 108 out of 140 countries on ICT adoption, as per the WEF Competitiveness Ranking,
2019. Productivity gains through digitisation thus present a significant opportunity
▪ A 10% increase in digital penetration could yield a 0.51-2.43% increase in GDP per capita in Asia, as per
International Telecommunications Union (ITU) estimates
▪ Key challenges: Bangladesh’s relatively low internet penetration (only 37.6% of households had internet
access in 2019*), slow internet speeds and insufficient foreign investment in digital platforms

20 *According to Bangladesh Multiple Indicator Cluster Survey (2019),;Source: ILO Global wage report 2020-2021, CEIC, Standard Chartered Research estimates 20
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Larger corporates are increasingly looking to set up their base in Bangladesh

If you plan to move out of China, where would Bangladesh remains a preferred destination for
you move? textiles
% of respondents in our survey of companies in % of respondents in each sector who selected VN,
China’s Greater Bay Area Cambodia (KH) and BD as investment destinations
Vietnam 40%

Cambodia 35% VN
Bangladesh
30%
Indonesia BD

25% KH
Malaysia

India 2021 20%

2020
Taiwan
2019 15%
Myanmar

Others 10%

Thailand 5%
Hong Kong
0%
Philippines Electronic-related Textiles and Wood, paper and Rubber, plastics Basic metals and
apparel printing products and other non- fabricated metal
metallic mineral products
0% 5% 10% 15% 20% 25% 30% product

Vietnam, Cambodia and Bangladesh remain top investment destinations for clients looking to move out of China

Based on our survey of companies operating in China’s Greater Bay Area; see Special Report – Shop Talk, 17 June 2021;
21 Source: Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Lower debt levels provide a fiscal runway to growth

Debt levels are rising but remain manageable Debt levels are still low relative to the region
% of GDP General government debt as % of GDP (2020)
45 120

40
100
Total
35

80
30

25 External
60

20
40
15

10 20

5
Domestic
0

Thailand
Indonesia

Sri Lanka
India
Vietnam
Nepal

Malaysia
Bangladesh
0
FY18
FY11

FY12

FY13

FY14

FY15

FY16

FY19

FY20

FY22F
FY21F

FY23F
FY17

22 Source: Bangladesh Bank, CEIC, IMF, Standard Chartered Research estimates

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
FY22 budget measures are positive for medium-term growth

▪ Corporate income tax rate lowered for publicly traded companies (to 22.5% from 25%), non-publicly
traded companies (to 30% from 32.5%) and one-person companies (to 25% from 32.5%)
▪ Rates for banks, insurance and cigarette companies (45% + 2% surcharge), mobile phone companies
(40-45%) remain unchanged
▪ Tax holidays offered to a wider range of industries to promote local investment:
▪ Mega-industry (e.g., three- and four-wheeler producers that invest at least BDT 1bn for 10 years) or
home appliance producers that promote ‘Made in Bangladesh’
▪ Investment for establishing hospitals in cities outside the four largest cities (Dhaka, Narayanganj,
Gazipur, Chittagong)
▪ IT enabler services – Tax exemptions extended to six more service areas (cloud services, system
integration, e-learning platforms, e-book publications, mobile app development services and IT
freelance services) until 2024, in addition to 22 service segments that already have exemptions
▪ Following a 1% reduction in the FY21 budget, Advance Tax (AT) on imported raw materials for
manufacturing industries has been reduced to 3% from 4%; this should incentivise local manufacturing

23 Source: Bangladesh Bank, Budget documents, CEIC, Standard Chartered Research estimates
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Policy support needed for smooth
LDC transition in the medium term

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Bangladesh to graduate from LDC status soon

LDC graduation criteria and Bangladesh’s status

2021, as defined by CDP*

Period 2021 2024

Countries graduate from Least Developed
Countries (LDC) status if they meet at least two of
Criteria
Threshold UN forecast Threshold UN forecast three criteria in two successive reviews.
Bangladesh met all three criteria in 2018 and is
Gross national expected to meet them again in 2021:
income (GNI) per 1,245-1,270 1,730-1,780 1,345-1,375 2,260-2,500
capita (USD) ▪ GNI has increased by c.8% annually since 2009
▪ HAI improved to 79.2 in 2021 from 53.3 in 2009
▪ EVI up marginally to 24.7 in 2021 from 23.2 in
Human Asset 2009
>66 79.2 >66 86.3
Index (HAI)

However, given the COVID pandemic, Bangladesh

will graduate in 2026 (five years after a successful
second review, instead of three years pre-COVID)
Economic
Vulnerability <32 24.8 <32 24.7
Index (EVI)
LDC-related tariff exemptions and other benefits
will be phased out gradually from 2027 onwards

*The Committee for Development Policy (CDP) is a subsidiary of the United Nations Economic and Social Council; BBS = Bangladesh Bureau of Statistics;
25 25
Source: IMF, Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
LDC graduation could pose a risk to apparel exports

Bangladesh has gained global apparel market Export destinations remain concentrated
share; LDC graduation could increase costs Exports by destination, % of total
Share of global apparel export market
8% 100%
Others
Bangladesh 90% Turkey
7%
Canada
80%
6%
70% USA
Vietnam
5%
60%

4% 50%

40%
3%

30% EU
2%
20%
Sri Lanka
1%
10%

0% 0%
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 FY05 FY20

26 Source: Bangladesh Bank, World Bank, World Trade Statistical Review 2020 (WTO), UNCTAD, ILO, Standard Chartered Research 26
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Bangladesh is most exposed to tariff hikes among graduating nations

Bangladesh’s tariffs are likely to rise sharply ▪ According to initial WTO estimates, a higher tariff
after LDC graduation (% increase in tariffs)
could lead to an export loss of c.14% for
10%
Bangladesh
Nepal and Bhutan may see a smaller impact from tariff
9% hikes, as their FTA with India is likely to continue even
after LDC graduation ▪ Bangladesh may therefore need to enter several
8%
regional trade agreements in the near future
7%

6% ▪ A situation could arise where key competitor

5% Vietnam enjoys duty-free access to Canada, the
EU and China, while Bangladesh faces tariffs of
4%
10-15% in these key markets starting in 2027
3%

2% ▪ Bangladesh also needs to reduce other costs such

as logistics, infrastructure and regulatory
1%

0%
Solomon islands

Tuvalu
Myanmar

Bhutan

Nepal

Bangladesh

27 Source: WTO-IDB database, Bangladesh Bank, Standard Chartered Research estimates

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
LDC graduation to increase Bangladesh’s long-term challenges

LDC countries enjoy 136 specific International Support Measures (ISMs)

Bangladesh’s ISMs will be phased out from 2027 unless they are separately negotiated with partners
Trade and market access will be significantly affected
▪ Graduation would lead to the withdrawal of Generalised Scheme of Preferences (GSP) facilities from the
EU, Canada, Japan and eight other markets, potentially leading to additional tariffs of c.8.9%
▪ Impact most adverse in EU, where c.98% of exports (duty-free) could face additional tariffs of c.12%
▪ Possible export loss worth c.14% of total exports (UNCTAD 2021)
▪ Some existing support from the WTO in the form of market access may also be phased out
Access to concessional finance may be curtailed
▪ Official Development Assistance (ODA) financing has been c.1.0-1.5% of GDP in the past three years
Two-fold lesson from the experience of countries that have graduated from LDC status
▪ Adequate preparation is required for a structural transformation of the economy
▪ Need to explore opportunities for preferential treatment with international organisations (WTO),
multilateral agencies (World Bank, ADB) and bilaterally (GSP with the EU)
Key drivers after graduation will be Bangladesh’s own preparation in the areas of boosting macroeconomic
efficiency, negotiating trade agreements, institutional efficacy, and quality of governance

28 Source: United Nations, Standard Chartered Research

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Governance is key to improving the ease of doing business

Inefficient bureaucracy and corruption are seen Governance indicators need to improve
as the most problematic factors for doing WGI 2019 (higher level indicates better governance)
business (% of respondents) 0.4
80% Vietnam
0.2
70% 0.0
60% -0.2

50% -0.4

40% -0.6

30% -0.8

20% -1.0 Bangladesh

-1.2
10%
-1.4
0%
High tax rates
Corruption

Poor work ethics

Inadequate infrastructure

Policy instability
Inadequately educated workforce
Inefficient bureaucracy

Limited access to finance

-1.6

Rule of law

Corruption
Accountability

Govt effectiveness

Regulatory quality
Political stability (no violence)
29 Source: Global Competitiveness Report 2020, World Governance index, Standard Chartered Research estimates
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
FDI flows appear to be correlated with ease of doing business

FDI weakened in FY20 and FY21 Bangladesh’s FDI flows are among the lowest in
Gross FDI, USD mn the region (World Bank’s Ease of Doing Business
4,500 1.4%
ranking and FDI per capita, USD)
180
4,000 % of GDP - 1.3% Vietnam
160
RHS
3,500 140
1.2% China
3,000 120

Net FDI per capita (USD) - 2020

1.1%
2,500 100
Indonesia
1.0%
80
2,000
0.9% 60
1,500
Philippines
40
0.8% India
1,000 Ethiopia
20 Sri Lanka
USD bn - LHS 0.7% Nigeria
500 Bangladesh
0

0 0.6% -20
FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

0 50 100 150 200

World Bank’s Ease of Doing Business rankings - 2019

30 Ease of Doing Business ranking, the lower the better; Source: World Bank, UNCTAD, Standard Chartered Research estimates
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
USD 320bn of infrastructure investment is needed by 2030

Infrastructure quality needs to improve ▪ Bangladesh’s infrastructure deficiencies have led to

Infrastructure quality rank* and score export and import delays relative to regional peers:

Overall Overall Efficiency ▪ 28 days to export vs an average 18 days in Asia

Country infra infra Roads of Port Air
ranking score railroad ▪ 34 days to import vs an average 20 days in Asia
▪ Export costs are USD 1,281/container, the highest in
Bangladesh 109 53.4 35.2 40.9 40.9 45.5 Asia, except India
▪ Container import costs are USD 1,515, the highest in
Sri Lanka 65 68.6 46.7 38.6 51.1 57.3
Asia

India 63 68.7 57.4 57.9 60.4 64.1

▪ Bangladesh needs to invest USD 320bn in infrastructure
by 2030, according to the IFC
Pakistan 93 59.0 49.1 49.1 51.3 52.3 ▪ Greater private participation in funding infrastructure
investment is needed, as:
Nepal 117 48.5 27.0 27.0 13.1 33.4
▪ Public finances are already stretched and institutional
capacity is limited
China 29 78.1 59.7 59.7 58.6 60.7
▪ Private funding of infrastructure projects remains
Indonesia 71 66.8 66.8 48.1 54.1 66.7
relatively low at 1.1% of GDP
▪ Bangladesh needs to improve the transparency and
Vietnam 75 65.4 65.4 36.0 46.4 47.4 timeliness of government decision-making

31 *The lower the better; Source: World Bank, Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Exports need to move up the technology ladder as wages rise

Exports are in low-tech sectors, while imports are Economic Complexity Index* has remained
high-tech (gross trade statistics by sector, USD mn) stagnant for the past two decades (ECI)
1.5

High and
medium tech 1.0

Imports
0.5
Exports

2018
Low tech 0.0

-0.5
2000
2010

Primary -1.0

-1.5
-30,000 -20,000 -10,000 0 10,000 20,000 30,000 China India Vietnam Cambodia Bangladesh

*A higher number means greater complexity; ECI Is a measure of an economy’s ‘relative knowledge intensity’, based on the relative knowledge intensity of the
32 products it exports; Source: ADB, www.atlas.cid.Harvard.edu, Standard Chartered Research
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Job creation has not kept pace with rising growth

Job creation and pace of poverty reduction have All sectors witnessed a decline in income
declined even as GDP growth has increased (%) % growth in average monthly income between Feb
8 2020 and Feb 2021
0%

7
-2%

-4%
6
GDP growth
(%) -6%
5
-8%

4 -10%
Employment
growth (%)
-12%
3
Poverty -14%
reduction
2 (ppt) -16%

-18%
1
Agri

Total
Trade

Accomodation
Transportation
Construction
Manufacturing

Other services
0
2000-05 2005-10 2010-16 2017

33 Source: Bangladesh Bank, Bangladesh Bureau of Statistics, Standard Chartered Research estimates
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
The pandemic has widened income inequality in Bangladesh

Households with weaker incomes suffered more from the pandemic

% distribution of income accruing to household groups (deciles) in February 2020 and February 2021
25% Feb-20 Feb-21

20%

15%

10%

5%

0%
Decile 1 2 3 4 5 6 7 8 9 10

34 Source: CPD survey, Standard Chartered Research

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Gearing up for the future

Opportunities and challenges co-exist, its all about perspective

▪ The export-led manufacturing growth model will likely remain central to sustained growth and job creation
▪ However, Bangladesh’s reliance on low labour costs to maintain its competitive edge may become increasingly
untenable as it consolidates its position as a middle-income country

Technology adoption holds the key

▪ Bangladesh’s competitiveness will increasingly depend on raising productivity, which will require a lower cost of doing
business and better market access

▪ The World Bank Survey indicates that a 25% increase in technology adoption is associated with a statistically significant
3% increase in profits per worker
Improvement in infrastructure facilities and governance indicators is also important
▪ Cost competitiveness could be improved by lowering the cost of doing business and accelerating regulatory approvals

▪ Export and market diversification is required; negotiating trade deals across key economies will likely be important
▪ Increasing FDI through investment-friendly measures could help attract investment, improve access to technology and
generate employment

35 Source: United Nations, Standard Chartered Research

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Disclosures appendix
Analyst Certification Disclosure: The research analyst or analysts responsible for the content of this research report certify that: (1) the views expressed and attributed to the research analyst or
analysts in the research report accurately reflect their personal opinion(s) about the subject securities and issuers and/or other subject matter as appropriate; and, (2) no part of his or her
compensation was, is or will be directly or indirectly related to the specific recommendations or views contained in this research report. On a general basis, the efficacy of recommendations is a
factor in the performance appraisals of analysts.

Global Disclaimer: Standard Chartered Bank and/or its affiliates (“SCB”) makes no representation or warranty of any kind, express, implied or statutory regarding this document or any information
contained or referred to in the document (including market data or statistical information). The information in this document, current at the date of publication, is provided for information and discussion
purposes only. It does not constitute any offer, recommendation or solicitation to any person to enter into any transaction or adopt any hedging, trading or investment strategy, nor does it constitute any
prediction of likely future movements in rates or prices, or represent that any such future movements will not exceed those shown in any illustration. The stated price of the securities mentioned herein,
if any, is as of the date indicated and is not any representation that any transaction can be effected at this price. SCB does not represent or warrant that this information is accurate or complete. While
reasonable care has been taken in preparing this document and data obtained from sources believed to be reliable, no responsibility or liability is accepted for errors of fact or for any opinion expressed
herein. This document does not purport to contain all the information an investor may require and the contents of this document may not be suitable for all investors as it has not been prepared with
regard to the specific investment objectives or financial situation of any particular person. Any investments discussed may not be suitable for all investors. Users of this document should seek
professional advice regarding the appropriateness of investing in any securities, financial instruments or investment strategies referred to in this document and should understand that statements
regarding future prospects may not be realised. Opinions, forecasts, assumptions, estimates, derived valuations, projections and price target(s), if any, contained in this document are as of the date
indicated and are subject to change at any time without prior notice. Our recommendations are under constant review. The value and income of any of the securities or financial instruments mentioned
in this document can fall as well as rise and an investor may get back less than invested. Future returns are not guaranteed, and a loss of original capital may be incurred. Foreign-currency
denominated securities and financial instruments are subject to fluctuation in exchange rates that could have a positive or adverse effect on the value, price or income of such securities and financial
instruments. Past performance is not indicative of comparable future results and no representation or warranty is made regarding future performance. While we endeavour to update on a reasonable
basis the information and opinions contained herein, we are under no obligation to do so and there may be regulatory, compliance or other reasons that prevent us from doing so. Accordingly,
information may be available to us which is not reflected in this document, and we may have acted upon or used the information prior to or immediately following its publication. SCB is acting on a
principal-to-principal basis and not acting as your advisor, agent or in any fiduciary capacity to you. SCB is not a legal, regulatory, business, investment, financial and accounting and/or tax adviser, and
is not purporting to provide any such advice. Independent legal, regulatory, business, investment, financial and accounting and/or tax advice should be sought for any such queries in respect of any
investment. SCB and/or its affiliates may have a position in any of the securities, instruments or currencies mentioned in this document. SCB and/or its affiliates or its respective officers, directors,
employee benefit programmes or employees, including persons involved in the preparation or issuance of this document may at any time, to the extent permitted by applicable law and/or regulation, be
long or short any securities or financial instruments referred to in this document and on the SCB Research website or have a material interest in any such securities or related investments, or may be
the only market maker in relation to such investments, or provide, or have provided advice, investment banking or other services, to issuers of such investments and may have received compensation
for these services. SCB has in place policies and procedures and physical information walls between its Research Department and differing public and private business functions to help ensure
confidential information, including ‘inside’ information is not disclosed unless in line with its policies and procedures and the rules of its regulators. Data, opinions and other information appearing herein
may have been obtained from public sources. SCB expressly disclaims responsibility and makes no representation or warranty as to the accuracy or completeness of such information obtained from
public sources. SCB also makes no representation or warranty as to the accuracy nor accepts any responsibility for any information or data contained in any third party’s website. You are advised to
make your own independent judgment (with the advice of your professional advisers as necessary) with respect to any matter contained herein and not rely on this document as the basis for making
any trading, hedging or investment decision. SCB accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental, consequential, punitive or
exemplary damages) from the use of this document, howsoever arising, and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or
inaccuracy with this document, its contents or associated services, or due to any unavailability of the document or any part thereof or any contents or associated services. This document is for the use
of intended recipients only. In any jurisdiction in which distribution to private/retail customers would require registration or licensing of the distributor which the distributor does not currently have, this
document is intended solely for distribution to professional and institutional investors. This communication is subject to the terms and conditions of the SCB Research Disclosure Website available at
https://research.sc.com/Portal/Public/TermsConditions. The disclaimers set out at the above web link applies to this communication and you are advised to read such terms and conditions / disclaimers
before continuing. Additional information, including analyst certification and full research disclosures with respect to any securities referred to herein, will be available upon request by directing such
enquiries to scgr@sc.com or clicking on the relevant SCB research report web link(s) referenced herein. MiFID II research and inducement rules apply. You are advised to determine the applicability
and adherence to such rules as it relates to yourself.

36 Continued on next page

Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Disclosures appendix
Market-Specific Disclosures – This document is not for distribution to any person or to any jurisdiction in which its distribution would be prohibited. If you are receiving this document in any of the
market listed below, please note the following:
Australia: The Australian Financial Services Licence for Standard Chartered Bank is Licence No: 246833 with the following Australian Registered Body Number (ARBN: 097571778). Australian
investors should note that this communication was prepared for “wholesale clients” only and is not directed at persons who are “retail clients” as those terms are defined in sections 761G and
761GA of the Corporations Act 2001 (Cth). Bangladesh: This research has not been produced in Bangladesh. The report has been prepared by the research analyst(s) in an autonomous and
independent way, including in relation to SCB. THE SECURITIES MENTIONED IN THIS REPORT HAVE NOT BEEN AND WILL NOT BE REGISTERED IN BANGLADESH AND MAY NOT BE
OFFERED OR SOLD IN BANGLADESH WITHOUT PRIOR APPROVAL OF THE REGULATORY AUTHORITIES IN BANGLADESH. Any subsequent action(s) of the Recipient of these research
reports in this area should be subject to compliance with all relevant law & regulations of Bangladesh; especially the prevailing foreign exchange control regulations. Botswana: This document is
being distributed in Botswana by, and is attributable to, Standard Chartered Bank Botswana Limited, which is a financial institution licensed by Bank of Botswana under Section 6 of the Banking
Act CAP 46.04 and is listed on the Botswana Stock Exchange. Brazil: SCB disclosures pursuant to the Securities Exchange Commission of Brazil (“CVM”) Instruction 598/18: This research has
not been produced in Brazil. The report has been prepared by the research analyst(s) in an autonomous and independent way, including in relation to SCB. THE SECURITIES MENTIONED IN
THIS REPORT HAVE NOT BEEN AND WILL NOT BE REGISTERED PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION OF BRAZIL AND MAY
NOT BE OFFERED OR SOLD IN BRAZIL EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS AND IN COMPLIANCE WITH THE
SECURITIES LAWS OF BRAZIL. China: This document is being distributed in China by, and is attributable to, Standard Chartered Bank (China) Limited which is mainly regulated by China
Banking and Insurance Regulatory Commission (CBIRC), State Administration of Foreign Exchange (SAFE), and People’s Bank of China (PBoC). European Economic Area: In Germany,
Standard Chartered Bank AG, a subsidiary of Standard Chartered Bank, is authorised by the European Central Bank and supervised by the Federal Financial Supervisory Authority (Bundesanstalt
für Finanzdienstleistungsaufsicht-“BaFin”) and the German Federal Bank (Deutsche Bundesbank). This communication is directed at persons Standard Chartered Bank AG can categorise as
Eligible Counterparties or Professional Clients (such persons constituting the target market of this communication following Standard Chartered Bank AG’s target market assessment) as defined
by the Markets in Financial Instruments Directive II (Directive 2014/65/EU) (“MiFID II”) and the German Securities Trading Act (“WpHG”). No other person should rely upon it. In particular, this is
not directed at Retail Clients (as defined by MiFID II and WpHG) in the European Economic Area. Nothing in this communication constitutes a personal recommendation or investment advice as
defined by MiFID II and WpHG. Hong Kong: This document is being distributed in Hong Kong by, and any part hereof authored by an analyst licensed in Hong Kong is attributable to, Standard
Chartered Bank (Hong Kong) Limited 渣打銀行（香港）有限公司 which is regulated by the Hong Kong Monetary Authority. India: This document is being distributed in India by Standard
Chartered Bank, India Branch (“SCB India”). SCB India is a branch of SCB, UK and is licensed by the Reserve Bank of India to carry on banking business in India. SCB India is also registered with
Securities and Exchange Board of India in its capacity as Merchant Banker, Depository Participant, Bankers to an Issue, Custodian, etc. For details on group companies operating in India, please
visit https://www.sc.com/in/important-information/india-result/. The RBI had advised that entities under their regulations shall not deal in virtual currencies ("VCs") or provide services for facilitating
any person or entity to deal with or settle VCs; however, the Supreme Court overturned the ban on cryptocurrency payments. A proposed law which may prohibit dealing in cryptocurrencies is
under discussion, according to media reports. Indonesia: Standard Chartered Bank, Jakarta Branch is a banking institution duly registered with and supervised by the Indonesian Financial
Service Authority. The information in this document is provided for information purposes only. It does not constitute any offer, recommendation or solicitation to any person to enter into any
transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or represent that any such future movements will
not exceed those shown in any illustration. Future changes in such laws, rules, regulations, etc., could affect the information in this document, but SCB is under no obligation to keep this
information current or to update it. Expressions of opinion are those of SCB only and are subject to change without notice. Japan: This document is being distributed to Specified Investors, as
defined by the Financial Instruments and Exchange Act of Japan (Act No.25 of 1948, known as “FIEA”), for information only and not for the purpose of soliciting any Financial Instruments
Transactions as defined by the FIEA or any Specified Deposits, etc. as defined by the Banking Act of Japan (Act No.59 of 1981). Kenya: Standard Chartered Bank Kenya Limited is regulated by
the Central Bank of Kenya. The information in this document is provided for information purposes only. The document is intended for use only by Professional Clients and should not be relied upon
by or be distributed to Retail Clients. Korea: This document is being distributed in Korea by, and is attributable to, Standard Chartered Bank Korea Limited which is regulated by the Financial
Supervisory Service and Financial Services Commission. Macau: This document is being distributed in Macau Special Administrative Region of the Peoples' Republic of China, and is attributable
to, Standard Chartered Bank (Macau Branch) which is regulated by Macau Monetary Authority. Malaysia: This document is being distributed in Malaysia by Standard Chartered Bank Malaysia
Berhad only to institutional investors or corporate customers. Recipients in Malaysia should contact Standard Chartered Bank Malaysia Berhad in relation to any matters arising from, or in
connection with, this document. Mauritius: Standard Chartered Bank (Mauritius) Limited is regulated by both the Bank of Mauritius and the Financial Services Commission in Mauritius. This
document should not be construed as investment advice or solicitation to enter into securities transactions in Mauritius as per the Securities Act 2005. New Zealand: New Zealand Investors should
note that this document was prepared for “wholesale clients” only within the meaning of section 5C of the Financial Advisers Act 2008. This document is not directed at persons who are “retail clients” as
defined in the Financial Advisers Act 2008. NOTE THAT STANDARD CHARTERED BANK (incorporated in England) IS NOT A “REGISTERED BANK” IN NEW ZEALAND UNDER THE RESERVE BANK
OF NEW ZEALAND ACT 1989, and it is not therefore regulated or supervised by the Reserve Bank of New Zealand.
37 Continued on next page
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]
Disclosures appendix
Country-Specific Disclosures (continued)
Pakistan: The securities mentioned in this report have not been, and will not be, registered in Pakistan, and may not be offered or sold in Pakistan, without prior approval of the regulatory authorities and/or
relevant governmental statutory body(ies) in Pakistan. Philippines: This document may be distributed in the Philippines by Standard Chartered Bank (Philippines) (“SCB PH”) to Qualified Buyers as defined
under Section 10.1 (L) of Republic Act No. 8799, otherwise known as the Securities Regulation Code (“SRC”), other corporate and institutional clients only. SCB PH does not warrant the appropriateness
and suitability of any security, investment or transaction that may have been discussed in this document with respect to any person. Nothing in this document constitutes or should be construed as an offer to
sell or distribute securities in the Philippines, which securities, if offered for sale or distribution in the Philippines, are required to be registered with the Securities and Exchange Commission unless such
securities are exempt under Section 9 of the SRC or the transaction is exempt under Section 10 thereof. SCB PH is regulated by the Bangko Sentral ng Pilipinas (BSP) (e-mail:
consumeraffairs@bsp.gov.ph). Any complaint in connection with any product or service of, or offered through, the Bank should be directed to the Bank’s Client Services Group via e-mail at
straight2bank.ph@sc.com (or any other contact information that the Bank may notify you from time to time). Singapore: This document is being distributed in Singapore by Standard Chartered Bank
(Singapore) Limited (UEN No.: 201224747C) only to Accredited Investors, Expert Investors or Institutional Investors, as defined in the Securities and Futures Act, Chapter 289 of Singapore. Recipients in
Singapore should contact Standard Chartered Bank (Singapore) Limited (as the case may be) in relation to any matters arising from, or in connection with, this document. South Africa: Standard Chartered
Bank, Johannesburg Branch (“SCB Johannesburg Branch”) is a Registered Credit Provider in terms of the National Credit Act 34 of 2005 under registration number NCRCP4. Thailand: This document is
intended to circulate only general information and prepare exclusively for the benefit of Institutional Investors with the conditions and as defined in the Notifications of the Office of the Securities and
Exchange Commission relating to the exemption of investment advisory service, as amended and supplemented from time to time. It is not intended to provide for the public. UAE: For residents of the
UAE – Standard Chartered Bank UAE does not provide financial analysis or consultation services in or into the UAE within the meaning of UAE Securities and Commodities Authority Decision No. 48/r of
2008 concerning financial consultation and financial analysis. UAE (DIFC): Standard Chartered Bank, Dubai International Financial Centre (SCB DIFC) having its offices at Dubai International Financial
Centre, Building 1, Gate Precinct, P.O. Box 999, Dubai, UAE is a branch of Standard Chartered Bank and is regulated by the Dubai Financial Services Authority (“DFSA”). This document is intended for use
only by Professional Clients and is not directed at Retail Clients as defined by the DFSA Rulebook. In the DIFC we are authorized to provide financial services only to clients who qualify as Professional
Clients and Market Counterparties and not to Retail Clients. As a Professional Client you will not be given the higher retail client protection and compensation rights and if you use your right to be classified
as a Retail Client we will be unable to provide financial services and products to you as we do not hold the required license to undertake such activities. United Kingdom: SCB and or its affiliates is
authorised in the United Kingdom by the Prudential Regulation Authority (“PRA”) and regulated by the Financial Conduct Authority (“FCA”) and the PRA. This communication is directed at persons SCB can
categorise as Eligible Counterparties or Professional Clients (such persons being the target market of this communication following SCB’s target market assessment) as defined by the FCA Handbook. In
particular, this communication is not directed at Retail Clients (as defined by the FCA Handbook) in the United Kingdom. Nothing in this communication constitutes a personal recommendation or investment
advice as defined by the FCA Handbook. United States: Except for any documents relating to foreign exchange, FX or global FX, Rates or Commodities, distribution of this document in the United States or
to US persons is intended to be solely to major institutional investors as defined in Rule 15a-6(a)(2) under the US Securities Exchange Act of 1934. All US persons that receive this document by their
acceptance thereof represent and agree that they are a major institutional investor and understand the risks involved in executing transactions in securities. Any US recipient of this document wanting
additional information or to effect any transaction in any security or financial instrument mentioned herein, must do so by contacting a registered representative of Standard Chartered Securities North
America, LLC, 1095 Avenue of the Americas, New York, N.Y. 10036, US, tel + 1 212 667 0700. WE DO NOT OFFER OR SELL SECURITIES TO U.S. PERSONS UNLESS EITHER (A) THOSE
SECURITIES ARE REGISTERED FOR SALE WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND WITH ALL APPROPRIATE U.S. STATE AUTHORITIES; OR (B) THE SECURITIES
OR THE SPECIFIC TRANSACTION QUALIFY FOR AN EXEMPTION UNDER THE U.S. FEDERAL AND STATE SECURITIES LAWS NOR DO WE OFFER OR SELL SECURITIES TO U.S. PERSONS
UNLESS (i) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNEL ARE PROPERLY REGISTERED OR LICENSED TO CONDUCT BUSINESS; OR (ii) WE, OUR AFFILIATED
COMPANY AND THE APPROPRIATE PERSONNEL QUALIFY FOR EXEMPTIONS UNDER APPLICABLE U.S. FEDERAL AND STATE LAWS. Any documents relating to foreign exchange, FX or global
FX, Rates or Commodities to US Persons, Guaranteed Affiliates, or Conduit Affiliates (as those terms are defined by any Commodity Futures Trading Commission rule, interpretation, guidance, or other
such publication) are intended to be distributed only to Eligible Contract Participants are defined in Section 1a(18) of the Commodity Exchange Act. Zambia: Standard Chartered Bank Zambia Plc (SCB
Zambia) is licensed and registered as a commercial bank under the Banking and Financial Services Act Cap 387 of the laws of Zambia and as a dealer under the Securities Act, No. 41 of 2016. SCB
Zambia is regulated by the Bank of Zambia, the Lusaka Stock Exchange and the Securities and Exchange Commission.
© 2021 Standard Chartered Bank. All rights reserved. Copyright in third party materials is acknowledged and is used under licence. You may not reproduce or adapt any part of these materials for any
purposes unless with express written approval from Standard Chartered Bank.
Document approved by Document is released at
Anubhuti Sahay 08:38 GMT 28 September 2021
Head, South Asia Economic Research (India)

38
Downloaded by Ellen Julie Olib Becker at Standard Chartered Bank [28 Sep 2021 11:10 GMT]