Dhaka, Bangladesh (BBN) – Bangladesh’s overall trade deficit widened by 36.34 per cent in the first seven months of the current fiscal year (FY) following higher growth of import payments than export earnings, officials said.
The trade gap rose to $5.28 billion during the July-January period of the FY 2016-17 from $3.87 billion in the same period of the last fiscal, according to the central bank’s latest statistics.
Talking to BBN, a senior official of the Bangladesh Bank (BB) said the trade gap may widen further in the coming months if the existing slower growth of export earnings compared to import payments continue.
The overall import payments including export processing zones grew by 9.88 per cent to $ 24.90 billion in the first seven months of the FY 17 from $22.66 billion in the same period of the FY 16.
On the other hand, the overall export earnings including export processing zones increased by 4.42 per cent to $19.62 billion during the period under review from $18.79 billion in the same period of the FY 16.
The central banker said higher trade deficit along with falling trend of inward remittances has kept the current account deficit balance during the period under review.
The country’s current account deficit reached at $754 million in the first in the seven months to January of the FY 17 from $2.47 billion surplus in the same period of the last fiscal.
The flow of inward remittances dropped by 16.86 per cent to $7.07 billion during the July-January period of the FY 17 from $8.50 billion in the same period of the last fiscal, the BB data showed.
The existing current account deficit balance may rise in the near future if the existing higher trade deficit along with decreasing trend of inward remittance continues, according to another BB official.
He also said the government as well as the central bank is now working to revamp the flow of inward remittance shortly.
“The government should take effective measures to expedite the export earnings immediately for minimising the trade gap and the current account deficit.
The country’s overall balance of payments (BoP), however, came down to $ 2.18 billion during the period under review from $2.68 billion in the same of the FY 16.
“Our BoP is still a healthy position despite negative trend of current account balance,” the central banker said, adding that higher financial account surplus has contributed to keep the overall BoP position almost stable.
The financial account surplus jumped by 148.25 per cent to $2.20 billion in the first seven months of this fiscal from $ 885 million the same period of the FY 16.
Meanwhile, the gross inflows of foreign direct investment (FDI) increased by 7.08 per cent to $ 1.71 billion during the period under review from $ 1.60 billion in same period of the FY 16 while net FDI inflows rose by 8.57 per cent to $975 million from $898 million.
BBN/SSR/SK