Bangladesh Economic Update, May 2014
The current issue of Bangladesh Economic Update attempts to understand the causes of declining growth in Gross Domestic Product (GDP) against the backdrop of recent underperformances in the external sector due to falling investment demand-induced decreased import of capital machinery, concentration of productive capacity in readymade garments and lack of production diversity in other exporting commodities, declining rate of wage earners’ remittance inflow and unsatisfactory inflow of Foreign Direct Investment (FDI) in the country.
External sector possesses upward trend in export earnings, despite slower rate of remittance inflow and import payments during the last fiscal year. Collapse in Rana Plaza and Tazreen Fashion, political instability challenged the export earnings to grow at a decreasing rate in recent years. However, despite these challenges, the growth in RMG sector can especially be ascribed to the increase in knit and woven garments. Moreover, export earnings increased more from non-traditional markets than that of the traditional markets.