Current Balance of Payments(BoP) Position of Bangladesh

Good Essays
Current Balance of Payments(BoP) Position of Bangladesh
One country’s economic performance is reflected through its Balance of payment. Balance of payments (BoP) accounts is an accounting record of all monetary transactions between a country and the rest of the world. Bangladesh is not different so. The improvement of its economy also depends on the performance of its Bop. According to a World Bank report published in 2012, The Current account balance (BoP; US dollar) in Bangladesh is 926.19 billion (World Bank indicators).
Import dependence is one of the weaknesses of BoP. The growth of import is significantly higher than that of export. If we can reduce the import dependency or increase the level of export, then it will help reduce the pressure on of our BoP. As our growth of export is lower than that of import most of the time our trade balance is negative. Bangladesh recorded a trade deficit of 1076.01 USD Million in August of 2012 (Bangladesh Bank). Our balance of trade consists of two components — import and export. Our performance of export makes us both happy and worried. Bangladesh exports mainly ready-made garments (RMG) including knitwear and hosiery (75% of export revenue).
The economy of Bangladesh is branded worldwide because of its quality RMG products. As we have massive export revenues from RMG sector, a slight change in this sector will have a significant impact on our economy. Other exports include: Shrimps, jute goods (including Carpet), leather goods and tea. Bangladesh main export partners are the United States (23% of total), Germany, United Kingdom, France, Japan and India. Bangladesh imports mostly petroleum product and oil, machinery and parts, soybean and palm oil, raw cotton, iron and steel and wheat. Bangladesh main import partners are China (17% of total), India, Indonesia, Singapore and Japan. We should not only diversify these export sectors but also improve our R&D wing.
Another strong component of BoP is remittance inflow. We

You May Also Find These Documents Helpful

  • Good Essays

    Current Balance of Payment Situation of Bangladesh: The economic performance of a country is reflected in its balance of payment (BoP) The balance of payment (BOP) refers to a method countries use to monitor all international monetary transactions at a specific period of time. Usually, the BOP is calculated every quarter and every calendar year. All trades conducted by both the private and public sectors are accounted for in the BOP in order to determine how much money is going in and out of…

    • 1120 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    IMPACT FACTOR: 0.485 (GIF) Bangladesh’s Balance of Payments: an Econometric Analysis M. S. RAHMAN CHOWDHURY Department of Economics Jatiya Kabi Kazi Nazrul Islam University Trishal, Bangladesh Abstract: The study was conducted at the Department of Economics, University of Chittagong, Bangladesh between December 2010 and April 2011. Balance of payments plays the most important role in a country’s economy. As a developing country, Bangladesh cannot claim that its performances are satisfactory…

    • 3782 Words
    • 16 Pages
    Powerful Essays
  • Good Essays

    Balance of payments (BOP) accounts are an accounting record of all monetary transactions between a country and the rest of the world.[1] These transactions include payments for the country's exports and imports of goods, services, and financial capital, as well as financial transfers. The BOP accounts summarize international transactions for a specific period, usually a year, and are prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation…

    • 468 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Introduction The US Balance of Payments (BOP) deficit is largely attributable to its massive current account deficit. The US has had a massive current account deficit since 1991, hitting an all time high of US$800 billion in 2005. "Never in the history of modern economics has a large industrial country run persistent current account deficits of the magnitude posted by the United States since 2000" (Edwards, 2005, p. 260). Accumulating consistent current account deficits mean that foreign countries…

    • 1151 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Balance of Payment

    • 1727 Words
    • 7 Pages

    BALANCE OF PAYMENT (BOP) Introduction: Balance of payments (BOP) is a record of economic transitions between the residents of one country and the rest of the world during one year. The balance of payment like all balance sheets must balance. The items, which lead to, an inflow of foreign earnings are placed on the credit side of the balance sheet, whereas the items, which give, rise to an outflow of foreign currency are placed on the debit side. Definition: “Balance of payment is a systematic…

    • 1727 Words
    • 7 Pages
    Good Essays
  • Powerful Essays

    Balance Of Payment

    • 1336 Words
    • 8 Pages

    Balance of Payment Balance of Payment is the recording system of economic and financial flows that take place over a specified time period between residents and non-residents of a given country. The residents of a country compromise of the general government, individual, private and non- profitable bodies serving individuals and enterprises. The Balance of Payment will consist mainly with three sections. 1. Current Account- This shows all the inflows and outflows of a country. 2. Capital Account-…

    • 1336 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    Balance of Payment

    • 753 Words
    • 4 Pages

    Balance of payment Most of exports and imports involve finance i.e. receipts and payments in money. An account of all receipts and payments is termed as Balance of Payments (BOP). According to Kindle berger, "The balance of payments of a country is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given yeriod of time". The balance of payment record is maintained in a standard double-entry book-keeping…

    • 753 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    BALANCE OF PAYMENTS

    • 3493 Words
    • 14 Pages

    Balance of Payments MEANING : Balance of payment can be defined as systematic record of all economic transactions between the residence of one country and the residence of another country during a given period of time.Economic transactions can broadly be categorized in to four heads which are: 1. VISIBLE ITEMS : visible items include all those tangible goods which can be imported and exported. These are visible as they are made up of some matter or material. this is known as merchandise also.…

    • 3493 Words
    • 14 Pages
    Powerful Essays
  • Better Essays

    Balance of Payments

    • 1490 Words
    • 6 Pages

    • Debit • Credit • BOP must be in equilibrium • Balance of payments in Pakistan • Causes of adverse balance of payments • Measures to correct BOP • Conclusion Introduction: Balance of payments refers to sum of both the balance of visible and invisible items. The balance of Payment is a comprehensive annualrecord of economic relation of a country with the rest of the world during a given period of time. A balance of payments (BOP) sheet is an accounting record…

    • 1490 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Balance of Payment

    • 5564 Words
    • 23 Pages

    Cristel Moriau Introduction to International Economic Law Academiejaar: 2009-2010 Balance- of- payment – exception in the WTO | | |Background | |The WTO is the principal regulator of the commercial pillar of the international economic…

    • 5564 Words
    • 23 Pages
    Powerful Essays