External Sector: Recent Trends and Challenges

MONTHLY Bangladesh Economic Update, August 2016

August 2016

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its monthly publication of the ‘Bangladesh Economic Update’ August 2016 reveals negative growth in two major external sector indicators - export shipment and wage earner’s remittance - in the starting month of FY 2016-17 compared to that of FY 2015-16 coupled with low business confidence is likely to exert pressure on country’s external sector balance.

In addition, recent declining growth in inflow of foreign direct investment (FDI) along with lack of expansion of productive capacity particularly in the manufacturing sector may adversely impact the overall performance of the country’s external sector, fears the research organizations.

Increasing export concentration of readymade garments (RMG) (from 83.9 percent in January-March 2015 to 84.6 percent in the corresponding period of 2016) together with declining growth in export earnings from RMG during the last couple of months, non-diversification of export markets, and lack of export competitive products may pose challenge to the performance of external sector, comments the UO.





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