What are Bangladesh's main export goods

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Economic policy

For 25 years, the respective governments have followed a business-friendly course that has contributed greatly to the boom in Bangladeshi industry. The exchange rate is based on the US dollar and basically results from supply and demand. The central bank does, however, intervene in order to achieve certain exchange rate targets if this appears necessary for the management of macroeconomic framework conditions ('managed float').

Current economic situation

Economic growth in the 2018/2019 financial year (July 2018 to June 2019) reached 8.2 percent and was stronger than the World Bank's growth forecast. For the 2019 calendar year, the World Bank expects growth of 7.3 percent.

According to the statistics of the Bangladeshi Statistics Institute, the growth of agriculture in the 2018/19 financial year was 3.51 percent and was thus slightly lower than in the previous year (2017/18 financial year: 4.19 percent). With its growth of 13.02 percent, the manufacturing industry was above the growth of the previous year (12.06 percent). The service sector (6.50 percent) grew at a similar rate to the previous year. Exports in the 2018/19 financial year grew by 10.55 percent, even faster than in previous years (e.g. 2017/18: 5.8 percent), and total export revenues amounted to 46.87 billion US dollars. Domestic demand is increasing.

Overall, the trade balance closed with a deficit of around 14.91 billion US dollars in the 2018/19 financial year and was thus significantly higher than in 2017/18 with around 1.11 billion US dollars. The demand for energy is growing, to date around 90 percent of the Bangladeshi population has access to the energy network. Remittances from guest workers rose 15 percent year-on-year to a total of $ 15.5 billion.

The current 2019/20 state budget has a volume of around 5 trillion taka (around 61 billion US dollars) and provides for a deficit of 5.0 percent of GDP. Capital expenditure for the expansion of the energy and transport infrastructure was further increased. Rural development is also a priority. Risks for the budget lie in the increasing but still low tax base, the unstable banking sector and the lack of an effective fight against inequality between rich and poor. The average annual inflation rate in 2018/19 was around 5.5 percent and was therefore only 0.2 percent lower than in the previous year.

Although the poverty rate has declined over the past two decades, at least 11.3 percent of the population (approximately 20 million) still live below the extreme poverty line of $ 1.9 per day. Undernourishment and malnutrition remain widespread phenomena. Population growth is 1.02 percent and the fertility rate per woman is 2.2.

Foreign trade and direct investment

In the 2018/19 financial year, export revenues rose further to 46.87 billion US dollars (for comparison: in 2017 they were 36.66 billion US dollars). The most important sales markets are the member states of the European Union (58 percent) and the USA (16 percent). At around 89 percent, the main export goods are clothing. This is followed by leather goods, jute goods (1.8 percent) and fish (1.5 percent).

The import volume increased to 55.4 billion US dollars in the 2018/19 budget year (2017: 43.5 billion US dollars). The main supplier countries are China (21.5 percent), India (12.2 percent) and Singapore (9.2 percent). The main imports are foodstuffs, yarns, fibers, fabrics, mineral oils and capital goods.

In spite of the state incentive measures introduced in recent years (tax breaks, establishment of export zones), private foreign direct investments are at USD 14.6 billion, a low level in a regional comparison. About half of foreign investment goes into the oil, gas, energy and telecommunications sectors. The service sector and the manufacturing industry (textiles, cement and fertilizers) each account for around a quarter of direct investment. The comparatively favorable legal conditions for foreign investments (including low taxes, the establishment of special export zones) and the growing domestic market are countered by a weak transport infrastructure, a high energy deficit, and widespread corruption and crippling bureaucracy.