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)