Economy of Bangladesh
Bangladesh is a developing country that is classified as a Next
Eleven emerging market and one of the Frontier Five. According to a
recent opinion poll, Bangladesh has the second most pro-capitalist
population in the developing world. Between 2004 and 2014,
Bangladesh averaged a GDP growth rate of 6%. The economy is
increasingly led by export-oriented industrialization. The
Bangladesh textile industry is the second-largest in the world.
Other key sectors include pharmaceuticals, shipbuilding, ceramics,
leather goods and electronics. Being situated in one of the most
fertile regions on Earth, agriculture plays a crucial role, with
the principal cash crops including rice, jute, tea, wheat, cotton
and sugarcane. Bangladesh ranks fifth in the global production of
fish and seafood. Remittances from the Bangladeshi diaspora provide
vital foreign exchange. The Bangladesh telecoms industry has
witnessed rapid growth over the years and is dominated by foreign
investors. The government has emphasized the development of
software services and hi-tech industries under the Digital
Bangladesh scheme. Bangladesh has substantial reserves of natural
gas and coal; and many international oil companies are involved in
production and exploration activities in the Bay of Bengal.
Regional neighbors are keen to use Bangladeshi ports and railways
for transshipment. Located at the crossroads of SAARC, the ASEAN+3,
BIMSTEC, and the Indian Ocean, Bangladesh has the potential to
emerge as a regional economic and logistics hub.In 2015, per-capita
income stood at USD 1,314. While achieving significant
macroeconomic stability, Bangladesh continues to face challenges
such as infrastructure deficits and energy shortages.
Overview of Bangladeshi Economy:Economy ofBangladesh
Currency Bangladesh Taka(BDT)
Fiscal year1 July - 30 June
Trade organizationsSAFTA,BIMSTEC
Statistics
GDP$655 billion (PPP) 31st; (2014) $205.60 billion (nominal)
44th; (2015)
GDP rank31st (PPP) / 44th (nominal)
GDP growth6.51% (2014-15)
GDP per capita$3,019 (PPP); (2014) $1,314 (nominal; 2015)
GDP by sectorAgriculture: 19%; industry: 30%; services: 51%
(2013)
Inflation(CPI)6.2% (2012)
Population below poverty line22% (2013)
Labour force87.9 million (2013)
Labour force by occupationagriculture: 40%, industry: 30%,
services: 30% (2013)
Unemployment4.5%(2013)
Main industriestextiles, food processing, steel, pulp and paper,
jute, shipbuilding, pharmaceuticals, electronics, automotive parts,
ceramics, fertilizer, construction materials, leather, natural gas,
renewable energy
Ease-of-doing-business rank117th
External
Exports$30.1 billion (FY2013-14)
Export goodstextiles,leathergoods, processed and frozen food,
porcelain, bone china, ocean-going ships, medicine, software,
consumer appliances,jute, jute products,tea
Main export partnersEuropean Union53.3%United
States21%Canada4.2%Turkey2.7%Japan2.2%
Imports$29.37 billion (FY2013-14)
Import goodspetroleum, machinery and equipment, foodstuffs, iron
and steel, automobiles, cotton, palm oil
Main import partnersThailand22.8%India11.2%China8.8%European
Union6.6%Indonesia6%
Grossexternal debt$36.21 billion (31 December 2012)
Public finances
Public debt22.8% of GDP (2013)
Revenues$14.67 billion (2013.)
Expenses$22.15 billion (2013.)
Foreign reserves$22.327 billion (Jul 2014)
Bangladesh has made significant strides in its economic sector
performance since independence in 1971. Although the economy has
improved vastly in the 1990s, Bangladesh still suffers in the area
of foreign trade inSouth Asianregion. Despite major impediments to
growth like the inefficiency ofstate-owned enterprises, a rapidly
growing labor force that cannot be absorbed by agriculture,
inadequate power supplies,and slow implementation of economic
reforms, Bangladesh has made some headway improving the climate
forforeign investorsand liberalizing thecapital markets; for
example, it has negotiated with foreign firms for oil and gas
exploration, better countrywide distribution of cooking gas, and
the construction ofnatural gaspipelinesandpower stations. Progress
on other economic reforms has been halting because of opposition
from the bureaucracy, public sector unions, and other vested
interest groups.The especially severe floods of 1998 increased the
flow ofinternational aid. So far the global financial crisis has
not had a major impact on the economy.Foreign aid has seen a
gradual decline over the last few decades but economists see this
as a good sign for self-reliance.There has been a dramatic growth
in exports and remittance inflow which has helped the economy to
expand at a steady rate.Export and Import:Fiscal YearTotal
ExportTotal ImportForeign Remittance Earnings
20072008$14.11b$25.205b$8.9b
20082009$15.56b$22.00b+$9.68b
20092010$16.7b~$24b$10.87b
20102011$22.93b$32b$11.65b
20112012$24.30b$35.92b$12.85b
20132014$30.10b$29.37b$14.00b
Economy of India
The Economy of India is the seventh-largest in the world by
nominal GDP and the third-largest by purchasing power parity (PPP).
The country classified as newly industrialized country, one of the
G-20 major economies, a member of BRICS and a developing economy
with around 7% average growth rate since last two decades. Indian
Economy become world's fastest growing major economy from last
quarter of 2014 replacing China.The long-term growth prospective of
Indian Economy is moderately positive due to its young population
and corresponding low dependency ratio, healthy savings and
investment rates, and increasing integration into the global
economy, Indian Economy has potential to become world's 3rd-largest
Economy by next decade and one of the largest economy by the
mid-century. And The Outlook for Short-term growth prospective is
also brighter as according to IMF Indian economy is the "bright
spot" in the global landscape, India also tops World Banks growth
outlook for the year 2015-16 for the first time with economy grown
7.3% in 2014-15 & expected to grow at 7.5% in 2015-16. India
has the one of fastest growing Service Sector in the world with
annual growth rate of above 9% since 2001, which contributes 57% of
GDP in 2012-13. India has capitalized its economy based on its
large educated English-speaking population to become a major
exporter of Information Technology services, Business Process
Outsourcing services, and software services with $167.0 billion
worth of service exports in 2013-14, which is also the
fastest-growing part of the economy. The IT industry continues to
be the largest private sector employer in India. India is also the
fourth largest start-up hub in the world with over 3,100 technology
start-ups in 2014-15 The agricultural sector is the largest
employer in India's economy but contributes a declining share of
its GDP (17% in 2013-14). India ranks second worldwide in farm
output. The Industry sector has held a constant share of its
economic contribution (26% of GDP in 2013-14). The Indian auto
industry is one of the largest in the world with an annual
production of 21.48 million vehicles in FY 2013-14. India has $600
billion worth of retail market in 2015 and one of world's fastest
growing E-Commerce markets. India's two major stock exchanges,
Bombay Stock Exchange and National Stock Exchange of India, had a
market capitalization of US$1.71 trillion and US$1.68 trillion
respectively as of Feb 2015,which ranks 11th & 12 largest in
the world respectively according to World Federation of
Exchanges.
Economy ofIndia
CurrencyIndian rupee(INR) () = 100Paise
Fiscal year1 April 31 March
Trade organizationsWTO,SAFTA,BRICS,G-20and others
Statistics
GDP$2.308 trillion (Nominal, April 2015) $7.996 trillion (PPP,
April 2015)
GDP rank7th(Nominal) /3rd(PPP)
GDP growth7.3% (2014-15)
GDP per capita$1,808 (Nominal:131th; 2015) $6,265 (PPP:121th;
2015)
GDP by sectorAgriculture: 17%Industry: 26%Services: 57%
(2013-14)
Inflation(CPI)CPI: 5.01%WPI:-2.36%(May, 2015)
Population below poverty line23.6%, 276 million (2011, World
Bank, based on 2005 ICP PPP) 21.9% (2012, Reserve Bank of India),
21.9% (2012, United Nation's Millennium Development Goal (MGD)
Labour force502.3 million (2014)
Labour force by occupationAgriculture: 49%Industry: 20%Services:
31% (2012)
Unemployment3% Urban2% RuralTotal=10.8 million(2013, NSSO
method)
Average gross salary$1.46 per hour ($3,036.8 yearly in 2010);
GNI per capita: $1,570 yearly per person (2010); Average household
income: $6,671 yearly (2010)
Main industriessoftware, petroleum
products,chemicals,pharmaceuticals, agriculture, textiles, steel,
transportation equipment,machinery, cement, mining,
construction
External
Exports$313.2 billion: merchandise exports$150.9 billion:
services exports$464.2 billion: Total (2013)
Export goodssoftware,petrochemicals,agricultureproducts,jewelry,
engineering
goods,pharmaceuticals,textiles,chemicals,transportation,oresand
other commodities
Main export partnersEuropean Union16.7%(2013) United
States12.5%United Arab Emirates10.1%China4.9%Singapore4.2%
Imports$466billion: merchandise imports$124.6billion: services
imports$590.6billion: Total (2013)
Import goodscrude oil, gold andprecious stones, electronics,
engineering goods,[20]chemicals,plastics,coaland ores, iron and
steel, vegetable oiland other commodities
Main import partnersChina11.1% (2013)European Union10.6%Saudi
Arabia7.9%United Arab Emirates7.1%Switzerland5.3%
FDIstockInflows: $223.7billionOutflows: $54.6billion
(2009-2013)
Public finances
Public debt66.7% of GDP (2013)
Budget deficit4.1% of GDP (201415)
Revenues27.5 trillion(US$440billion) (2015,IMF)
Expenses37.6 trillion(US$600billion) (2015,IMF)
Economicaid$2.43billion (2013)
Credit ratingBBB- (Domestic)BBB- (Foreign)BBB+ (T&C
Assessment)Outlook: Stable(Standard & Poor's)[26]
Foreign reserves$354.3billion (as of 12 June 2015)
External trade and investment
Global trade relationsUntil the liberalization of 1991, India
was largely and intentionally isolated from the world markets, to
protect its economy and to achieve self-reliance. Foreign trade was
subject to import tariffs, export taxes and quantitative
restrictions, while foreign direct investment (FDI) was restricted
by upper-limit equity participation, restrictions on technology
transfer, export obligations and government approvals; these
approvals were needed for nearly 60% of new FDI in the industrial
sector. The restrictions ensured that FDI averaged only around $200
million annually between 1985 and 1991; a large percentage of the
capital flows consisted of foreign aid, commercial borrowing and
deposits of non-resident Indians. India's exports were stagnant for
the first 15 years after independence, due to general neglect of
trade policy by the government of that period. Imports in the same
period, due to industrialization being nascent, consisted
predominantly of machinery, raw materials and consumer goods. Since
liberalization, the value of India's international trade has
increased sharply, with the contribution of total trade in goods
and services to the GDP rising from 16% in 199091 to 47% in 200810.
India accounts for 1.44% of exports and 2.12% of imports for
merchandise trade and 3.34% of exports and 3.31% of imports for
commercial services trade worldwide. India's major trading partners
are the European Union, China, the United States of America and the
United Arab Emirates. In 200607, major export commodities included
engineering goods, petroleum products, chemicals and
pharmaceuticals, gems and jewelry, textiles and garments,
agricultural products, iron ore and other minerals. Major import
commodities included crude oil and related products, machinery,
electronic goods, gold and silver. In November 2010, exports
increased 22.3% year-on-year to 850.63 billion (US$14 billion),
while imports were up 7.5% at 1251.33 billion (US$20 billion).
Trade deficit for the same month dropped from 468.65 billion
(US$7.4 billion) in 2009 to 400.7 billion (US$6.4 billion) in 2010.
India is a founding-member of General Agreement on Tariffs and
Trade (GATT) since 1947 and its successor, the WTO. While
participating actively in its general council meetings, India has
been crucial in voicing the concerns of the developing world. For
instance, India has continued its opposition to the inclusion of
such matters as labour and environment issues and other non-tariff
barriers to trade into the WTO policies.
Balance of paymentsSince independence, India's balance of
payments on its current account has been negative. Since economic
liberalization in the 1990s, precipitated by a balance of payment
crisis, India's exports rose consistently, covering 80.3% of its
imports in 200203, up from 66.2% in 199091. However, the global
economic slump followed by a general deceleration in world trade
saw the exports as a percentage of imports drop to 61.4% in 200809.
India's growing oil import bill is seen as the main driver behind
the large current account deficit, which rose to $118.7 billion, or
11.11% of GDP, in 200809. Between January and October 2010, India
imported $82.1 billion worth of crude oil. Indian economy has run a
trade deficit every year over 2002-2012 periods, with a merchandise
trade deficit of US$189 billion in 2011-12. Its trade with China
has the largest deficit, about $31 billion in 2013. India's
reliance on external assistance and concessional debt has decreased
since liberalization of the economy, and the debt service ratio
decreased from 35.3% in 199091 to 4.4% in 200809. In India,
External Commercial Borrowings (ECBs), or commercial loans from
non-resident lenders, are being permitted by the Government for
providing an additional source of funds to Indian corporates. The
Ministry of Finance monitors and regulates them through ECB policy
guidelines issued by the Reserve Bank of India under the Foreign
Exchange Management Act of 1999. India's foreign exchange reserves
have steadily risen from $5.8 billion in March 1991 to $318.6
billion in December 2009. In 2012, the United Kingdom announced an
end to all financial aid to India, citing the growth and robustness
of Indian economy.
Economy of Sri LankaWith an economy worth $80.591 billion (2015)
($233.637 billion PPP estimate) and a per capita GDP of about
$11,068.996 (PPP), Sri Lanka has mostly had strong growth rates in
recent years until the government toppled early in 2015 where most
development projects were stopped abruptly on corruption claims. In
GDP per capita terms, it is ahead of other countries in the South
Asian region. The main economic sectors of the country are tourism,
tea export, apparel, textile, rice production and other
agricultural products. In addition to these economic sectors,
overseas employment contributes highly in foreign exchange, 90% of
expatriate Sri Lankans reside in the Middle East. Since becoming
independent from Britain in February 1948, the economy of the
country has been affected by natural disasters such as the 2004
Indian Ocean earthquake and a number of insurrections, such as the
1971, the 1987-89 and the 1983-2009 civil war. The parties which
ruled the country after 1948 did not implement any national plan or
policy on the economy, veering between left and right wing economic
practices. The government during 1970-77 period applied pro-left
economic policies and practices. Between 1977 and 1994 the country
came under UNP rule and between 1994 and 2004 under SLFP rule. Both
of these parties applied pro-right policies. In 2001, Sri Lanka
faced bankruptcy, with debt reaching 101% of GDP. The impending
currency crisis was averted after the country reached a hasty
ceasefire agreement with the LTTE and brokered substantial foreign
loans. After 2004 the UPFA government has concentrated on mass
production of goods for domestic consumption such as rice, grain
and other agricultural products. The Sri Lankan economy has seen
robust annual growth at 6.4 percent over the course of 2003 to
2012, well above its regional peers. Following the end of the civil
conflict in May 2009, growth rose initially to 8 percent, largely
reflecting a peace dividend, and underpinned by strong private
consumption and investment. While growth was mostly private sector
driven, public investment contributed through large infrastructure
investment, including post war reconstruction efforts in the North
and Eastern provinces. Growth was around 7 percent in 2013, driven
by a rebound in the service sector which accounts for approximately
60 percent of GDP. With nearly 2 million Sri Lankans living abroad,
overseas employment has contributed with foreign exchange and
remittances in the order of 10 percent of GDP in 2013. Overall,
unemployment at 4 percent is low, although youth unemployment (ages
1524) at around 17.3 percent and low female labor force
participation at 30 percent do pose a challenge.Economy ofSri
Lanka
CurrencySri Lankan rupee(LKR)
Fiscal yearCalendar year
Trade organizationsSAFTA,WTO
Statistics
GDPUS$ 80.591 Billion (World bank.) / US$ 233.637 Billion
PPP
GDP growth7.3%
GDP per capitaUS$ 3,818.161 (2015) / US$ 11,068.996 USD PPP
GDP by sectoragriculture: 12.8%;industry: 29.2%;services: 58%
(2009)
Inflation(CPI)6.9%
Population below poverty line4.3%
Gini coefficient36.4
Labour force8,319,680
Labour force by occupationagriculture: 32.7%; industry: 26.3%;
services: 41%
Unemployment4.3%
Main industriesprocessing ofrubber,tea, coconuts,tobaccoand
other agricultural commodities; telecommunications,
insurance,banking;tourism, shipping;clothing,textiles;
cement,refining, information services,construction
Ease-of-doing-business rank81st
External
Exports$10.89 billion
Export goodstextiles and apparel, pharmaceuticals, tea, spices,
diamonds, emeralds, rubies, coconut products, rubber manufactures,
fish
Main export partnersUnited States21.8%United
Kingdom8.3%India4.5%Germany4.2%
Imports$20.02 billion
Import goodstextile fabrics, mineral products, petroleum,
foodstuffs, machinery and transportation equipment
Main import partnersIndia21.5%China17.6%Singapore10.1%United
Arab Emirates6.1%Iran4.9%
FDIstockUS$1 Billion
Grossexternal debt$19.45 billion
Public finances
Public debt81% of GDP
Revenues$8.495 billion
Expenses$12.63 billion
Economicaid$808 million
Foreign reserves$7.2 billion
External sector:Trade account issuesIn the recent past, the Sri
Lankan Government has identified some key focal areas to address
the external imbalances of the economy, especially with regard to
reducing its high trade deficit (~15% ofGDPfor 2012) in order to
make the economy comply with theMarshallLerner condition. Sri
Lanka's oil import bill accounts for an estimated 27% of total
imports while its pro-growth policies have resulted in an
investment goods import component of 24% of total imports. These
inelastic import components have led to Sri Lanka's Export goods
price elasticity + Import goods price elasticity totaling less than
1, resulting in the country not complying with theMarshallLerner
condition.Some of the suggested proposals include: Import
substitution of investment goods and consumer goods Tax concessions
towards value added exports Negotiating longer credit periods for
oil imports Allowing the external value of the currency to be
determined by market forces (with minimal central bank
intervention).Key cushioning items in the current account Tourism
revenue (Sri Lanka's tourism revenue accounted for ~US$1bn for
FY2014 with ~1mn tourist arrivals) External
workerremittancesaccounted for ~US$6bn in FY2014 However, as the
income account reported a negative balance owing to high debt
servicing payments and repatriation of income from foreign
investments, the current account deficit was reported at 5.5%to
2014 GDP.Capital account Within the capital account, borrowings
still account for a significant proportion as opposed toForeign
direct investments. FDIs were estimated at ~US$800mn for
FY2015Overall balance (BOP) The economy ended with an overall
positive balance of US$151mn for 2014 (vs. a US$1,061mn deficit in
FY2013)