Declining growth in remittance and export earnings over the recent months is likely to exert pressure on the country’s balance of payment, said Unnayan Onneshan, an independent think-tank, in its latest report published on Saturday.
The decline in the remittance inflow is likely to pose a threat to social infrastructure of rural Bangladesh since the remittance recipient households in rural areas expend a significant portion of their income on consumption, health and education, said the UO in its February issue of Bangladesh Economic Update.
It is imperative to maintain a conducive atmosphere for higher inflow of remittance through effective regulatory measures and diplomatic negotiations, the research organisation said in the report titled External Sector: Recent Trends and Challenges.
Non-diversification of export markets and lack of export competitive products may pose serious challenge to the performance of external sector, it said.
Export concentration of readymade garment is also increasing, the UO added.
Negative growth in opening letter of credit for industrial raw materials also implies the lack of entrepreneurship and productive capacity in the economy, which together with current challenges of unemployment and low private investment may cause the GDP growth rate to decelerate, it observed.
In the context, the research organisation called for a thorough review of the current trade and industrial policies to address the structural bottlenecks and creation of a stable business climate to attract increased inflow of private investment including foreign direct investment into the country.
It also emphasised on adopting new strategies to expand the country’s productive capacities that enhance utilisation of available resources through efficient entrepreneurial capabilities and increased production linkages.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Trade & Commerce