Dhaka, Bangladesh (BBN)- Bangladesh’s overall trade deficit has widened by 13.04 percent to US$6.59 billion in the first nine months of the current fiscal year amid slower growth of export earnings and higher import payments for fuel oil, officials said.
The overall trade deficit rose to $6.59 billion in July-March of the fiscal year (FY ’12) from $5.82 billion during the corresponding period last fiscal, according to the central bank statistics.
During the period, export earnings stood at $17.68 billion against the import payments of $24.27 billion, the central bank officials said.
“The central bank expects that the overall trade gap may narrow down in the coming months due to a falling trend in imports particularly food grains and non-essential luxury items,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in Dhaka on Wednesday.
He also said the declining trend in import may continue until June as the banks discourage opening of fresh letters of credit (LCs) non-essential luxury products in line with the BB’s latest monetary policy.
Earlier on January 26 last, the central bank unveiled a ‘restrained’ monetary policy aiming to bring down inflation to a single digit by the end of June through discouraging credit flow to unproductive sectors.
The import of fuel oils increased by 53.23 percent to $3.52 billion in the first nine months of FY ’12 from $2.30 billion of the same period in the previous fiscal.
Import of food grains such as rice and wheat, in terms of settlement of LCs, witnessed a negative growth of 48.46 percent to $713 million in the first nine months of FY ’12 from $1.38 billion of the corresponding period last fiscal.
“The import of food grains particularly rice has almost ceased following bumper harvest of Boro crops,” the central banker said, adding that such lower food grains import will help ease inflationary pressure on the economy.
The central bankers, however, said declining trend in export earnings continued in the recent months because of eurozone crisis.
Bangladesh’s export earnings grew by 10.44 percent to $17.68 billion in the first nine months of FY ’12 against $16.01 billion of the same period in the FY ’11.
The export earnings growth came to 8.14 per cent in the July-April period of FY ’12 from 10.44 per cent in the July-March period of the same fiscal year, according to the Export Promotion Bureau (EPB) statistics.
In April, the overall export earnings decreased by 7.13 percent to $1.89 billion against $2.03 billion in the corresponding period of the previous calendar year.
“Export earnings from apparel sectors including knitwear and woven garments slowed down due to recession in the European Union (EU),” the BB official said, adding that such slower growth of export earnings might not influence the country’s overall trade gap because of lower imports.
BBN/SSR/AD-23May12-8:50 pm (BST)