Dhaka, Bangladesh (BBN)– Bangladesh’s trade deficit widened by nearly 118 per cent in the first half (H1) of the current fiscal year (FY) 2014-15 because of higher import payments and lower export receipts, officials said.

The overall trade deficit rose to US$ 5.31 billion during the July-December period of FY 15 from $2.44 in the corresponding period of the previous fiscal, according to the central bank statistics.

“The overall imports increased significantly during the period under review mainly due to higher imports of capital machinery,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.

He also said higher imports in the sectors of power and energy, leather and tannery, electronics, food processing, shipbuilding, ceramic and melamine have contributed to the rise in the capital-machinery import in the first six months of the FY 15.

On the other hand, the country’s export earnings grew by 1.54 per cent to $14.73 billion in the six months against $14.51 billion in the corresponding period of previous fiscal.

“The trade deficit may widen further in the coming months, if the existing trend of foreign trade continues,” he noted.

The central banker 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 10.47 per cent to $7.42 billion in the first six months of the FY 15 from $6.72 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, according to the BB officials.

They said the current account deficit increased by $111 million to $1.42 billion in the July-December period of the FY 15 from $1.31 billion a month ago.
 
It was $1.44 billion surplus during the July-December period of the last fiscal year, they added.
 
The balance of payments (BoP) came down to $1.44 billion during the period under review from $2.62 billion in the corresponding period of the FY 14.
 
The BoP may come down to $642 million by the end of  FY 15 from $5.48 billion in the previous fiscal, according to the BB’s latest projection.

BBN/SSR/AD-06Feb15-3:33 pm (BST)