Robust trade growth drives economy, shows BB data    

With a robust growth in foreign and domestic trade, the economy is showing constant resilient to the external and internal shocks, according to the Bangladesh Bank (BB) data released last week.

According to the central bank statistics, export marked steady growth in the past five years with average 22.61 percent rise and recorded the highest ever income of $27.03 billion in the end of June 2013. The growth in foreign trade in the first nine months of the current 2013-14 financial year (FY14) was 22.24 percent despite the pre-election political unrest.

Similarly, the import surged by 16.42 percent in the past eight months of FY14 when the country imported goods worth $26.14 billion. The average annul import cost, however, was $30.98 billion in the past four years, BSS reports.

Bangladesh BankBB data also shows that the higher import growth was driven by import of industrial raw-materials, equipment and machineries as opening of letters of credit (LC) for import of capital machinery rose by 54 percent, industrial raw materials by 5 percent and fuel by 15 percent in the first eight months of the current financial year.

“The strong growth in export indicates stronger internal demand, which is the main driving force of an economy,” Governor Dr Atiur Rahman told BSS.

He said many countries around the world suffered financial crisis only because of drastic fall in their domestic demand.

“But, Bangladesh is maintaining a strong domestic demand that makes the economy resilient to the shocks whether it is from the internal socio-political crisis or from the slipover impact of downturn in developed economies,” Dr Rahman said.

He said growth in import, which was mainly for import of industrial raw-materials, equipment and machineries, would drive industrial growth, which is vital for sustainable development.

A BB official said the central bank would pay over one billion dollar to the Asian Clearing Union (ACU) this week to clear the payments for import. This will be the highest single payment to the ACU after 2011. BB pays the import bill to ACU in every two months.

He said the reserve would remain much above the comfortable level even after the big payment to the ACU as the reserve reached to its all-time high by crossing $20-billion mark this year.

Bangladesh also became the only South Asian country that has surplus in its current account balance. The balance was $2.02 billion till the end of February this year.

The current account surplus coupled with the steady export earnings and stable import made local currency Taka stronger compared to other countries in South Asia including India.