Bangladesh - Balance of payments
The continuing trade deficit has been offset in small part by private
transfers, mainly from earnings of workers in the Middle East, but large
amounts of foreign aid and heavy short-term borrowing are needed to
handle the balance-of-payments problem. In FY 1991/92, the infusion of
$1.59 billion in foreign aid and transfers helped lessen a negative
balance of payments. In 1995, the trade deficit widened and there was a
stagnation in the growth of remittances from overseas workers. The
rising trade deficit, coupled with a decline in international aid
disbursements due to political turmoil, caused foreign exchange reserves
to drop from a peak of $3.4 billion in April 1995 to $2.1 billion by the
end of 1996, and $1.7 billion by 1999.
During the 1990s, the manufacturing sector revived, due to export growth
led by garments and knitwear. Bilateral quota systems with developed
country markets, whose quota regimes limited the exports of many
competing Asian suppliers, were a factor in the growth of garment
exports starting from 1994. Other factors contributing to the success of
the garment industry in Bangladesh include few governmental regulations;
the provision of customs-bonded warehouses for imported cloth; and
financial arrangements allowing foreign banks to finance raw materials
inventories. Nevertheless, Bangladesh must diversify its export base in
order to improve its trade imbalance—garments and knitwear
continue to account for 75% of export earnings. Leather and shrimp are
potential growth sectors. The elimination of the quota system on
textiles and clothing under the WTO was due to expire in 2005, and
Bangladesh will need to improve the performance and quality of its
garment export sector
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| world trade |
Bangladesh-Balance and Terms of Trade
Bangladesh has had a negative trade balance since independence
in 1971. In the mid-1980s, the annual pattern was for exports to
cover only around 30 percent of the cost of imports (see
table 14,
Appendix). Merchandise exports reached the value of US$1 billion in
FY 1987 for the first time, and in that year import payments were
US$2.6 billion, leaving a trade deficit of over US$1.5 billion,
about average throughout the 1980s. The annual deficit was limited
by government controls to between US$600 and US$700 million on
capital goods and US$500 million on nonagricultural industrial
commodities. The largest component in the latter category was crude
oil and petroleum products. In addition, Bangladesh incurred a debt
each year for grain and other food needs, always higher than US$200
million, and sometimes going to double or even more (at least
US$607 million in FY 1985). The country had a positive balance on
nonfood agricultural production, because jute and ready-made
garment exports eliminated the deficit in fibers, textiles, and
garments.
In FY 1986, the
United States was the leading buyer of
Bangladeshi exports, taking some 25 percent of the total. The
American portion had increased from 16 percent the year before and
12 percent the year before that. The dynamic new element was readymade
garments; the United States purchased over 80 percent of this
new industry's production, adding to Bangladesh's traditional base
of jute manufactures (mostly carpet backing) and seafood. The next
biggest customer for Bangladesh (but with only 28 percent of the
American volume) was Japan, which chiefly purchased frozen seafood.
Other important customers in FY 1986 were Britain, Italy, Pakistan,
Singapore, and Belgium. Trade with communist countries was also
significant. Almost 10 percent of exports were under barter terms
with the Soviet Union, China, Bulgaria, Hungary, and
Czechoslovakia.
One way the society has been able to turn its economic problems
and overpopulation to some advantage is by exporting workers to
wealthy, Islamic countries, chiefly in the Persian Gulf. The
remittances from these workers have come to constitute one of
Bangladesh's greatest sources of foreign exchange. In FY 1986
remittances were nearly US$575 million, covering 23.5 percent of
import financing requirements and substantially exceeding the total
receipts from jute, the chief export. The government maintained
records only of new recruits working abroad each year--a peak of
77,694 in 1985--but knowledgeable observers believed that possibly
as many as 450,000 were overseas at any one time. Throughout the
1980s, more than a third went annually to Saudi Arabia with a peak
of 39,350 new recruits in 1987 (see
table 6, Appendix). Other
countries receiving large number of Bangladeshi workers in 1987
included the United Arab Emirates (9,953), Kuwait (9,559), Qatar
(5,831), and Iraq (3,847). Such workers normally contracted to
remain abroad three years and often stayed several years longer.
They worked as laborers, under terms negotiated government to
government, and generally lived under segregated conditions that
effectively prevented Bangladeshi men (who cannot bring their
families with them) from assimilating with the local population or
experiencing non-Bangladeshi ways of life. When they have returned
to Bangladesh with savings and material acquisitions, they
generally have had no difficulty fitting back into their society.
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| balance trade |
Balance of Trade refers to the difference
between the value of a country's merchandise exports and the value of
its merchandise imports. The trade regime of Bangladesh has undergone
many changes over the years. Initially, it followed a line of import
substitution, implying a stress on restricting imports. The country also
had difficulties in import financing during the 1970s. But with the
change in government policy towards promoting a laissez faire economy
and with inflows of foreign aid
in increased volumes, Bangladesh started to import more in the early
1980s. There was a marked departure in the trade policy of the country
in the 1990s, when its trade regime was substantially liberalised with
the implementation of the Financial Sector Reforms programme.
The
export policy of the country up to 1990 was characterised by adoption
of ad hoc measures, which discouraged the growth of the manufacturing
sector having high export potentialities. The two-year export policy
announced in 1993 contained a lot of incentives. Later, the government
announced a five-year export policy for 1997-2002, which aimed at
increasing production and trade through attracting entrepreneurs to
establish export-oriented industries, improving the balance of payments
through narrowing the trade gap with the diversification of
exportables, and expanding the export base, developing marketability of
export items, and establishing backward linkage with export-oriented
industries. The new export policy contains an export development
strategy leading to intensive export-oriented activities.
Bangladesh
has been experiencing deficits in her trade balance despite adoption of
many export promotion measures during the 1980s and 1990s. The deficit
in the trade balance of the country increased from 8.5% of the GDP in
1975-76 to 14.1% of the GDP in 1981-82, and then gradually declined to
6.6% of the GDP in 1991-92. The deficit remained at a moderate level
during the 1990s and was 6.9% of the GDP in 1997-98 and 5.5% of the GDP
in 1999-2000. The decline in deficits in the trade balance was due to
faster growth of exports during 1984-85 to 1994-95. During this period,
there was a significant shift in the structure of the export sector from
primary goods to manufactured goods and from traditional to
non-traditional items of exports. The percentage share in the value of
traditional items of exports declined from 97.27 in 1972-73 to 68.99 in
1982-83, and further to 12.17 in 1994-95. The percentage share in the
value of manufactured commodities, on the other hand, increased form
57.03 in 1972-73 to 64.58 in 1982-83 and further to 86.98 in 1994-95.
This marked shift in the structure of exportable goods was due to the
substantial growth of the readymade garments sector during this period.
Along
with the growth in exports, the import payments of Bangladesh also
showed continuous increase. Export receipts as percent of GDP increased,
amidst fluctuations, from 4.0 in 1974-75 to 6.9 in 1984-85, and further
to 13.3 in 1994-95. Import payments as percent of the GDP, on the other
hand, increased sharply from 8.0 in 1974-75 to 19.7 in 1984-85, and
further to 22.6 in 1994-95. There were some structural changes in the
composition of imports. Import payments in respect of major primary
goods declined from $836 million in 1984-85 to $585 million in 1989-90,
but rose to $868 million in 1994-95, and further to $1,448 million in
1998-99. On the other hand, import payments in terms of major
intermediate goods increased from $433 million in 1984-85 to $567
million in 1989-90, to $924 million in 1994-95, and further to $1,104
million in 1998-99. Import of capital goods increased substantially from
$691 million in 1984-85 to $1,296 million in 1989-90, $1,688 million in
1994-95, and further to $1,969 million in 1998-99. Despite the steep
rise in import payments, a corresponding rise in export receipts helped
in restricting the growth of the trade deficit.
Bangladesh Balance of Trade
Bangladesh
reported a trade deficit equivalent to 1196 Million USD in January of
2012. Historically, from 1995 until 2012, Bangladesh Balance of Trade
averaged -1309.2400 Million USD reaching an all time high of -56.4000
Million USD in August of 2009 and a record low of -5370.6000 Million
USD in June of 2008. Bangladesh exports mainly ready made garments
including knit wear and hosiery (75% of exports revenue). Others
include: Shrimps, jute goods (including Carpet), leather goods and tea.
Bangladesh main exports partners are United States (23% of total),
Germany, United Kingdom, France, Japan and India. Bangladesh imports
mostly petroleum product and oil, machinery and parts, soyabean and palm
oil, raw cotton, iron and steel and wheat. Bangladesh main imports
partners are China (17% of total), India, Indonesia, Singapore and
Japan. This page includes a chart with historical data for Bangladesh
Balance of Trade.
Balance of Trade
The balance of trade is the difference between the monetary value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; a negative balance of trade is known as a trade deficit or, informally, a trade gap. The balance of trade forms part of the current account, which also includes other transactions such as income from the international investment position as well as international aid. If the current account is in surplus, the country's net international asset position increases correspondingly. Equally, a deficit decreases the net international asset position. The Balance of Trade is identical to the difference between a country's output and its domestic demand - the difference between what goods a country produces and how many goods it buys from abroad; this does not include money respent on foreign stocks, nor does it factor the concept of importing goods to produce for the domestic market
The balance of trade is the difference between the monetary value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; a negative balance of trade is known as a trade deficit or, informally, a trade gap. The balance of trade forms part of the current account, which also includes other transactions such as income from the international investment position as well as international aid. If the current account is in surplus, the country's net international asset position increases correspondingly. Equally, a deficit decreases the net international asset position. The Balance of Trade is identical to the difference between a country's output and its domestic demand - the difference between what goods a country produces and how many goods it buys from abroad; this does not include money respent on foreign stocks, nor does it factor the concept of importing goods to produce for the domestic market
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| world trade |
Bangladesh Current Account
Bangladesh
reported a current account surplus equivalent to 264 Million USD in the
fourth quarter of 2011. Historically, from 2005 until 2011, Bangladesh
Current Account averaged 547.0600 Million USD reaching an all time high
of 1417.0000 Million USD in September of 2009 and a record low of
-557.0000 Million USD in June of 2005. Current Account is the sum of the
balance of trade (exports minus imports of goods and services), net
factor income (such as interest and dividends) and net transfer payments
(such as foreign aid). This page includes a chart with historical data
for Bangladesh Current Account.
Current Account
Current Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers in the current accounts of most of the world's economies. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant. Positive net sales to abroad generally contributes to a current account surplus; negative net sales to abroad generally contributes to a current account deficit. Because exports generate positive net sales, and because the trade balance is typically the largest component of the current account, a current account surplus is usually associated with positive net exports. The net factor income or income account, a sub-account of the current account, is usually presented under the headings income payments as outflows, and income receipts as inflows. Income refers not only to the money received from investments made abroad (note: investments are recorded in the capital account but income from investments is recorded in the current account) but also to the money sent by individuals working abroad, known as remittances, to their families back home. If the income account is negative, the country is paying more than it is taking in interest, dividends, etc. For example, the United States' net income has been declining exponentially since it has allowed the dollar's price relative to other currencies to be determined by the market to a point where income payments and receipts are roughly equal of trade forms part of the current account, which also includes other transactions such as income from the international investment position as well as international aid. If the current account is in surplus, the country's net international asset position increases correspondingly. Equally, a deficit decreases the net international asset position.
Current Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers in the current accounts of most of the world's economies. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant. Positive net sales to abroad generally contributes to a current account surplus; negative net sales to abroad generally contributes to a current account deficit. Because exports generate positive net sales, and because the trade balance is typically the largest component of the current account, a current account surplus is usually associated with positive net exports. The net factor income or income account, a sub-account of the current account, is usually presented under the headings income payments as outflows, and income receipts as inflows. Income refers not only to the money received from investments made abroad (note: investments are recorded in the capital account but income from investments is recorded in the current account) but also to the money sent by individuals working abroad, known as remittances, to their families back home. If the income account is negative, the country is paying more than it is taking in interest, dividends, etc. For example, the United States' net income has been declining exponentially since it has allowed the dollar's price relative to other currencies to be determined by the market to a point where income payments and receipts are roughly equal of trade forms part of the current account, which also includes other transactions such as income from the international investment position as well as international aid. If the current account is in surplus, the country's net international asset position increases correspondingly. Equally, a deficit decreases the net international asset position.
Current account balance (BoP; US dollar) in Bangladesh
The
Current account balance (BoP; US dollar) in Bangladesh was last
reported at 2502421559.43 in 2010, according to a World Bank report
released in 2011. The Current account balance (BoP; US dollar) in
Bangladesh was 3556126394.05 in 2009, according to a World Bank report,
published in 2010. The Current account balance (BoP; US dollar) in
Bangladesh was reported at 926185438.56 in 2008, according to the World
Bank. Current account balance is the sum of net exports of goods,
services, net income, and net current transfers. Data are in current
U.S. dollars.This page includes a historical data chart, news and
forecasts for Current account balance (BoP; US dollar) in Bangladesh.
Bangladesh is considered as a developing economy which has recorded GDP
growth above 5% during the last few years. Microcredit has been a major
driver of economic development in Bangladesh and although three fifths
of Bangladeshis are employed in the agriculture sector, three quarters
of exports revenues come from garment industry. The biggest obstacles to
sustainable development in Bangladesh are overpopulation, poor
infrastructure, corruption, political instability and a slow
implementation of economic reforms.
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| trade balance |
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