Bangladesh Economic Upadate, October 2015
The current issue of Bangladesh Economic Update attempts to understand the current status of external sector against the backdrop of trade imbalance, negative balance in the account of service for a long time, declining rate of growth in remittance inflow, unsatisfactory inflow of Foreign Direct Investment (FDI), and large gap between the commitment and disbursement of foreign aid in the country. The Update reveals that imbalance in the current account of FY 2014-15 compared to that of FY 2013-14 is likely to exert pressure on country’s balance of payments and thus on the trend in external sector. Overall external balance is showing positive balance because of inflow of one or two items in a huge amount, but decrease in remittance and export of manpower, increasing deficit in service and trade balance are likely to impede the growth rate of the economy. Inflows of remittance become negative in the last Fiscal Year (FY) for the first time within ten years mainly because of the decline in labour migration in major markets like Saudi Arabia and UAE. This declinig inflow of remitance is likely to exert adverse impact on rural economy since consumption and expenditure of people living in rural areas are largely contingent upon remittance sent by their household members living aborad.