Dhaka, Bangladesh (BBN)– The country’s overall trade deficit widened by 53.16 per cent in the first 11 months of the just concluded fiscal year (FY), 2014-15, due to higher import payments and lower export receipts, officials said.
The trade deficit rose to $9.46 billion during the July-May period of the FY 2014-15 from $6.18 billion in the same period of the previous fiscal, according to the central bank’s latest statistics.
Experts said the trade deficit may cross US$10 billion in FY15 for the first time in the history of Bangladesh.
The trade deficit is widening gradually due mainly to lower export earnings while imports are growing at a healthy pace, they explained.
The imports grew 12.20 per cent to $37.23 billion during the 11 months against $33.18 billion in the corresponding period of the previous fiscal.
On the other hand, the country’s export earnings grew only 2.83 per cent to $27.76 billion during the last July-May period, against $27.00 billion in the corresponding period, the BB data showed.
“It’s very natural for a growing economy like Bangladesh,” Dr Biru Paksha Paul, chief economist of Bangladesh Bank (BB), said while explaining the widening of trade deficit.
The chief economist also said trade deficit is not necessarily bad for an emerging country like Bangladesh because the major share of imports represents capital machinery and industrial inputs which provide potential of growth for the future.
Besides the gap in the trade in goods, deficit also increased in trade in services during the period under review.
Gap in services trade stood at $4.29 billion during the period, which was $3.66 billion in the same period of the previous fiscal.
Trade in services includes tourism, financial service and insurance.
The country earned $2.81 billion in services trade during the first 11 months of the fiscal while payments on services surged to $7.10 billion during the period, from $6.52 billion in the same period of the previous fiscal.
Talking to BBN, another BB official said such higher trade deficit pushed down the current-account balance significantly, despite uptrend in inward remittances.
Bangladesh received $13.74 billion during the July-May period of FY15, registering a 7.03 per cent growth over the corresponding period of the previous fiscal.
The country’s current-account balance entered the negative territory last September due to higher landed imports, recorded by the customs department, according to the central banker.
However, the current-account deficit rose to $2.0 billion in the July-May period from $1.64 billion a month ago. It was $1.36 billion surplus during the July-May period of the previous fiscal, the BB data showed.
The overall balance of payments (BoP) came down to $3.59 billion during the period under review, from $4.97 billion in the corresponding period of FY 14.