Activity remained buoyant during the 2016 fiscal year, but political, social and security issues again disrupted the economic life of the country. In July 2016, Dhaka was struck by a violent attack, responsibility for which was claimed by Islamic State, just at a time when the political situation was tending to stabilize. Nonetheless, tensions remain high between the opposition and the ruling party. Growth will also benefit from the rapid development of services, especially in the area of health and education. Foreign investment is likely to remain dynamic but could be hit by the worsening security context. The country will continue to enjoy support from the Asian Development Bank for infrastructure development projects, thanks to a USD 8bn program over the coming years. This will, in particular, enable the construction of a 102km railway line in the south of the country.
Meanwhile, household consumption, the main component of GDP, is expected to remain dynamic. The agriculture sector, which employs half the economically active population, will continue to sustain domestic demand. However, expatriate remittances, although still high, will slow due to the difficulties experienced by the economies of the Gulf States, the main host countries for Bangladeshis. Furthermore, exports are expected to remain sustained, thanks to the strength of the textile sector which benefits from the country's 2nd place in the world in terms of production capacity. Nonetheless, they are likely to be hit by sluggish world demand and worsening price competitiveness. In addition, The Unite States have confirmed that the Generalized System of Preferences will not be restored (initially suspended following the collapse of the Rana Plazza in April 2013). However, Bangladeshi products will continue to enjoy preferential access to the European market.
Finally, inflation is set to remain high in 2017. Relative control over food prices will, however, make it possible to contain price increases.