Trade deficit widens to $7.34b in 10 monthsAKM Zamir Uddin
The country’s trade deficit soared to $7.34 billion in the first 10 months of the current financial year because of a slower growth in export earning.
The trade deficit in July-April of FY 2011-12 was 9.87 per cent higher than that of the same period of the previous financial year when the trade gap was $6.68 billion, according to the latest Bangladesh Bank data.
A BB official told New Age that the trade deficit had widened in the period due to a declining trend of export earning and higher import payment for fuel oil.
The growth in export earning in the period came down to 8.20 per cent from around 40 per cent in July-April of FY 2010-11 due to the current economic crisis in Europe and USA, he said.
BB data showed that the country’s import payments surged to $26.88 billion against exports worth $19.54 billion in July-April in the FY 2011-12.
Import of food grains, raw materials and capital machinery dropped heavily but that of petroleum marked a sharp rise in the first 10 months.
According to the BB data on LC opening released last week, petroleum import increased by 56.94 per cent in the first 10 months of the current financial year. The growth in the import of the product was 41.48 per cent during the same period of the previous financial year.
LC opening for petroleum import soared by 62.62 per cent in the first 10 months of this financial year against a 30.50-per cent LC opening growth during the same period of the last financial year.
In the first 10 months, the foreign direct investment stood at $580 million, 7.94 per cent lower than the $630 million in the corresponding period of the previous financial year, showed the BB data.
Another BB official said Bangladesh had failed to attract the foreign direct investments at a desirable level in the period due to poor infrastructure, shortage of power and energy supply and political instability.
The lower than expected FDI inflow also puts pressure on the overall balance of payments and the foreign exchange reserves, he said.
The country’s current account balance, however, in the period increased by 35.72 per cent compared to that of the same period of last financial year because of a double digit growth in remittance in the first 10 months.
The current account balance or the difference between the country’s savings and investment in July-April of FY 2011-12 stood at $509 million, up by 35.72 per cent from $376 million in the same period of FY 2010-11.
BB data showed remittance inflow in the first 10 months of the current financial year increased by 10.41 per cent compared with that of the same period of the previous financial year.
The expatriate Bangladeshis in July-April of FY 2011-12 financial year remitted $10.61 billion against $9.61 billion during the same period of the FY 2010-11.
So, the account balance reached at a strong position after a downtrend, said the BB official.
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