Trade deficit widens to $15.73b in 10-month
Staff Reporter :
Bangladesh’s trade deficit widened significantly in the first ten-month (July-April) period of the current fiscal year, even amid the ongoing restriction on imports.
According to the latest data of the Bangladesh Bank, the trade balance with the rest of the world increased to $ 15.73 billion during the mentioned period.
In the ten-month period, Bangladesh imported goods and services worth $ 58.78 billion against the export earnings worth $43.049 billion, the data showed.
The deficit is mainly for higher import payment than export earning, increase in commodity prices including fuel oil in international markets, inflow of remittances and foreign investment not reaching expected level during the time, experts said.
They said the central bank has been forced to inject dollars into the market from the foreign currency reserves due to the widening trade deficit.
The central bank has injected around $ 13 billion into the market so far, which was $ 7.62 billion in the same period of last year, according the BB data.
The foreign currency reserves declined to $ 29.99 billion due to the injection of the dollars, the data showed.
On the other hand, the current-account deficit increased to $37.72 billion in the July-April period, which was $15.48 billion in the same period of last year following higher import-payment obligations and lower inflow of remittances.
Bangladesh has a big deficit in the overall balance. During the mentioned period of the current fiscal year, the overall balance stood at $ 8.80 billion, which was $5.29 billion in the same period of last year.
Foreign Direct Investment (FDI), however, increased to $4.20 billion in July-April period from $3.89 billion that was in same period of the last fiscal year.
The country’s foreign trade covering import and export increased significantly during the period under review amid
gradually-reopening economic activities, both domestic and global, after more than a year of pandemic Covid-19 shocks.
Prof Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), said that higher prices of essential commodities along with petroleum products on the global market pushed the overall import-payment pressure on the economy.
He predicts that the trade gap may widen further in the months ahead.
Rahman also suggested that the policymakers should take initiatives to keep going the existing robust growth in export earnings.
Experts predict that the falling trend in current-account deficit may continue in the coming months if the lower inflow of remittances and higher import expenses persist.
