South Asia emerged as one of the major garment producing regions with the increase of north-south trade and is also deemed to be affected significantly because of the global financial crisis. Within South Asia, the case of Bangladesh, is important to be looked at-as to what extent the financial and the real sectors are impacted. Bangladesh�s financial markets are quite insulated from the rest of the world, but the probable impact of the global crisis on this country is routed through its real sector or the foreign trade sector. Bangladesh�s industrial production growth has averaged more than 6% over the last 5 years. The export sector has been the engine of industrial growth, with ready-made garments (RMG) leading the way–having grown at an average of 30% over the last 5 years and comprised more than 75% of the total exports in 2007-08. EC and USA are the largest markets for RMG from Bangladesh, together accounting for 90% of total exports in FY08. These statistics reflect the highly skewed pattern of exports, thus also reflect the vulnerability of the country. The World Bank has projected a lower economic growth for Bangladesh, from 6.5 percent to 5.4 percent for the current fiscal year (2009) and in the worse case 4.8%. As per their study, the global financial crisis is likely to affect Bangladesh’s exports in the near future. However, the Bangladesh Garments Manufacturers� and Exporters� Association (BGMEA) is optimistic about the exports of RMG to the West, particularly, the US. BGMEA asserts that the recession indicates both risks and opportunities for the RMG industry and Bangladesh’s lower-end basic garments have been forecasted to be less affected than the high value items.