In the external sector, the Current Account Balance (CAB) continued to be in surplus reflecting the increasing inflows of remittances bolstered by continued export expansion and declining imports. Import growth was sluggish in FY13, partly reflecting the significant fall in food import demand, lower petroleum imports as well as slower demand for imports related to manufacturing output.
Remittances
were buoyed by larger numbers of Bangladeshi workers moving abroad in FY12 as
well as real wage growth in the Middle East following the 'Arab Spring' events.
Remittance growth of 12.6 percent in FY13 is higher than the 10.2 percent
growth in FY12, though this growth did slow to 4.2 percent during the second
half of the year compared to the first half of FY13 when remittance growth was
22 percent. This slow-down is a function of a 34 percent drop in the number of
migrant workers between July-April FY13 relative to the same period in FY12.
The capital account shows that foreign direct investment is projected to have
increased from USD 1.2 billion in FY12 to USD 1.3 billion in FY13. Medium and
long term loan disbursements rose from USD 1.5 billion in FY12 to USD 1.7
billion in FY13 and net aid flows increased from USD 671 million to USD 841
million during the same period. Improved external balances are reflected in the
accumulation of international reserves to over USD 15 billion at the end of
FY13, sufficient to cover 5.5 months of projected imports. The overall balance
of payments surplus in FY13 was USD 5128 million.
Exports
Total
exports in FY13 had a strong growth over the same period of FY12. Aggregate
exports increased by 11.2 percent in FY13 to USD 27027.4 million from USD
24301.9 million in FY12. Apparels (woven garments and knitwear products)
continued to occupy an overwhelming (above three fourth) share of the export
basket in FY13.
Readymade garments
(woven and
knitwear): Woven and knitwear products, which fetch about 79.6 percent of total
export earnings, registered a high increase in receipts, from USD 19089.7
million of FY12 to USD 21515.8 million in FY13. Woven and Knitwear products
grew by 15.0 percent and 10.4 percent respectively in FY13.
Frozen food
The frozen
foods sector, comprising mainly of shrimps, registered marked decrease in
earnings during FY13. Receipts from export of shrimp and fish decreased by 11.5
percent from USD 579.8 million of FY12 to USD 512.9 million in FY13.
Raw jute
In FY13, raw
jute valued at USD 229.9 million was exported compared with USD 266.3 million
in FY12, i.e. a 13.7 percent fall in exports during the year.
Jute goods (excluding carpets)
Jute
products valued at USD 800.7 million was exported compared with USD 701.1
million in FY12 showing an increase of 14.2 percent in FY13.
Leather
Export
earnings from leather and leather products increased by 21.0 percent to USD
399.7 million in FY13 from
USD 330.2 million in FY12.
Home Textile
Export
earnings from home textile declined by 12.6 percent to USD 791.5 million in
FY13 from USD 906.1 million in FY12.
Engineering products
These
exports fell marginally from USD 375.5 million in FY12 to USD 367.5 million in
FY13.
Chemical Products:
Export
earnings from Chemical Products decreased by 9.7 percent to USD 93.0 million in
FY13 against
USD 103.0 million in FY12.
Imports
Import
payments (fob) in FY13 were USD 33576.0 million registering a positive growth
of 0.8 percent compared to USD 33309.0 million in FY12. Table 10.2 shows the
composition of imports; the major items are petroleum related products, wheat,
textiles, raw cotton, edible oil, sugar, capital machinery, plastics, rubber
and fertiliser. Food grains import decreased substantially by 19.4 percent to
USD 726.0 million in FY13 (rice 89.6 percent) from USD 901.0 million in FY12
mainly due to adequate domestic supply of rice during the period. On the other
hand wheat import increased by 13.5 percent to USD 696.0 million in FY13.
Pulses, oil seeds, wheat, crude petroleum, chemicals, textile & articles
thereof etc. recorded increases of imports during FY13. Imports of other food
items recorded significant negative growth of 13.1 percent to 3128.0 million in
FY 13 from USD 3600.0 million in FY12 (sugar 37.9 percent, edible oil 14.7
percent, spices 14.5 percent and milk & cream 3.2 percent). However, pulses
recorded positive import growth of 73.7 percent during the year. Consumer and
intermediate goods import 91recorded negative growth which decreased by 0.5
percent to USD 16694.0 million in FY13 from USD 16783.0 million in FY12
(fertiliser 14.0 percent, POL 7.1 percent, raw cotton 3.8 percent, clinker 3.4
percent, yarn 2.0 percent). Except iron, steel & other base metal, capital
machinery and others under the category of capital goods and others showed
negative import growth. Therefore, imports of capital goods and others
decreased by 9.0 percent to USD 11031.0 million in FY13 from USD 12118.0
million in FY12 (others 13.0 percent and capital machinery 8.5 percent).
However, imports by EPZ increased by 18.5 percent to USD 2505.0 million in FY13
compared to USD 2114.0 million in FY12. Workers' Remittances10.22 Despite
continued global economic slowdown, the flow of inward remittances from
Bangladeshi nationals working abroad remained strong in FY13 and continued to
play an important role in strengthening the current account balance. Remittance
inflow increased by 12.6 percent to USD 14338 million in FY13 from USD 12734
million in FY12. (Appendix-3, Table-XVI) However, as discussed above the rate
of remittance growth sharply slowed down in the second half of FY13 compared
with the first half.
Foreign Aid
Total
official foreign aid disbursement increased by 31.0 percent to USD 2786 million
in FY13 from USD 2126 million received in FY12 (Table 10.4). This was despite a
decline in food aid which amounted to USD 20 million in FY13 against USD 69
million in FY12. The disbursement of project assistance stood at USD 2766 million
in FY13, compared with USD 2057 million in FY12. Total outstanding official
external debt as of 30 June 2013 was USD 23319 million (18.0 percent of GDP in
FY13) against USD 22095 million as of 30 June 2012 (19.0 percent of GDP in
FY12). Repayment of fficial external debt amounted to USD 1102 million
(excluding repurchases from the IMF) in FY13. Out of the total repayments,
principal payments amounted to USD 906 million while interest payments stood at
USD 196 million in FY13, against USD 789 million and USD 200 million
respectively during FY12. The debt-service ratio as percentage of exports was
4.1 percent in FY13.