Chittagong port

Chittagong port of Bangladesh

Dhaka, Bangladesh (BBN)– Bangladesh’s overall trade deficit may cross US$22 billion by the end of the current fiscal year (FY) 2018-19, the central bank projected.

Talking to the BBN, a senior official of the Bangladesh Bank (BB) said: “Our trade deficit is likely to create new record in this fiscal year mainly due to higher import payments against lower export receipts,”

He also said the upward trend of import continues in this fiscal because of high import of fuel oils and capital machinery for implementation of different infrastructure development projects, including Padma Bridge.

The gap in merchandise trade with the rest of the world is projected to reach at $22.20 billion in the FY 19 from $18.37 billion in the previous fiscal, according to the BB’s latest estimation, released in its monetary policy on Tuesday.

The higher trade deficit may push the current-account deficit further up in the FY 19 despite an uptrend in inward remittances.

Bangladesh’s current-account deficit is projected to reach $10.16 billion in the FY 19 against $9.18 billion a year ago.

“The widening current account deficit led to a reversal of the liquidity injections due to a decline in net foreign assets (NFA) at negative 4.3 per cent in June 2018, well below the initial FY 18 target of 5.4 per cent, accompanied by exchange rate depreciation, and sales of foreign exchange reserves,” the BB said in its MPS.

The BB also projected the negative growth of NFA at 1.2 per cent for H1 of the FY 19 and 1.6 per cent for H2 of this fiscal respectively.

The country’s overall balance of payments (BoP) may turn into positive territory by the end of this fiscal from the existing negative level.

The central bank estimated that the BoP would reach $379 million in the FY 19 from estimated negative $691 million in the FY 18.