Dhaka, Bangladesh (BBN) – Bangladesh’s overall trade deficit more than doubled in the first quarter of the current fiscal year (FY) 2016-17 for higher import payments against relatively lower export earnings, officials said.
The trade gap widened by 110.87 per cent to $2.37 billion during the July-September period of the FY 17 from $1.12 billion in the same period of last fiscal, according to the central bank’s latest statistics.
Talking to BBN, a senior official of the Bangladesh Bank (BB) said the trade deficit may widen further in the coming months if the rising trend in import payments continues.
The overall import payments, including by export-processing zones, grew by 17.27 per cent to $10.27 billion in the Q1 of the FY 17 from the corresponding figure of $8.76 billion, the BB data showed.
The BB official said the imports increased significantly during the period under review mainly due to higher import of capital machinery along with back-to-back import made by readymade garment (RMG) sector.
“The import-payment obligations may rise further in the coming months as implementation of different infrastructure- development projects, including Padma Bridge, is expediting gradually,” the central banker explained.
On the other hand, Bangladesh’s export earnings, including that of export-processing zones, grew by 3.52 per cent to $7.91 billion in the first three months of the FY 17 from $7.64 billion in the same period of the FY 16.
During the period, the current-account balance entered a negative territory after two years following wider trade deficit alongside a downturn in inward remittance.
The country’s current-account deficit reached $504 million in the Q1 of the FY 17 from $1.66 billion surplus in the same period a year ago. It deficit was $293 million in the Q1 of the FY 15.
The flow of inward remittances dropped by 17.70 per cent to $3.19 billion in the first three months of the FY 17 from $3.88 billion in the same period of the last fiscal.
However, financial-account surplus rose to $2.04 billion in the Q1 of FY 17 from $ 377 million the same period of last fiscal year.
The inflow of net foreign direct investment (FDI) increased by 8.45 per cent to $ 642 million during the period under review from $ 592 million in the Q1 of the FY 16.
On the other hand, overall balance of payments (BoP) came down to $ 1.79 billion during the period under review from $ 1.97 billion in the same of FY 16.
BBN/SSR/AD