Country’s overall trade deficit almost doubled in the first five months of the current fiscal year (FY) 2014-15 because of higher import payments and lower export receipts, officials said.
The trade deficit rose 99.15 per cent to US$ 4.48 billion during the July-November period of FY 15 from $2.25 billion in the corresponding period of the previous fiscal.
Bangladesh Bank holds little hope to see any improvement in the situation in the near future. Trade circles and officials point out the country’s current situation-evidently stemming from the standoff on the political front— as one of major reason, reports the Financial Express.
“The trade deficit may widen further in the coming months, if the existing trend in foreign trade continues,” a senior official of the central bank told the FE Tuesday.
The overall imports increased significantly mainly due to higher import of petroleum products and capital machinery, the banker explained.
Overall imports increased 16.62 per cent to $16.40 billion during the period under review, from $14.06 billion in the same period of the previous year, BB data showed.
On the other hand, the country’s export earnings grew only peanut 0.91 per cent to $11.92 billion in the five months against $11.81 billion in the corresponding period of previous fiscal.
The BB official predicts the upward trend in overall import may continue to outpace export in the coming months “unless the political impasse is resolved immediately”.
Talking to the FE, another BB official said higher trade deficit pushed down the current-account balance significantly, despite uptrend in inward remittances as a prop to the balance.
The remittance inflow increased 11.59 per cent to $6.16 billion in the first five months of the FY 15 from $5.52 billion in the period of comparison.
Country’s current-account balance entered the negative territory in the month of September last due to higher landed imports, recorded by the customs department, the BB official mentioned.
He also said the current-account deficit increased by $129 million to $1.32 billion in July-November from $1.19 billion a month ago.
It was $1.13 billion surplus during the July-November period of the last fiscal year, according to the central bank statistics.
The balance of payments (BoP) surplus also came down to $1.16 billion during the period under review from $2.04 billion in the corresponding period of the FY 14.