Badrul Ahsan :
The country’s trade deficit widened by 46.86 percent in the July-March period of the current fiscal year (2016-17) compared with the same period of the previous fiscal mainly due to lower export earnings against higher import payments, Central Bank data shows.
The cumulative trade deficit of the country stood at $7.03 billion till March of the current fiscal which was $4.79 billion in the corresponding period of the last fiscal (2015-16).
According to the latest Bangladesh Bank (BB) data, import payment rose by 11.06 percent in the July-March period of FY17 against 7.02 per cent growth in the same period of FY16.
On the other hand, the export earnings dropped by 4.01 per cent in the first nine months of FY17 against 7.96 per cent growth in the same period a financial year ago.
The import payments stood at $32.36 billion in the first nine months of FY17 while those were $29.14 billion in the corresponding period of FY16.
A BB official told The New Nation on Monday that the country’s export earnings posted a sluggish growth in the first nine months of the current fiscal because of slow earnings from major markets like the United States and the United Kingdom.
He said the import payments mainly increased in the last few months due to a rise in payments for capital machinery, industrial raw materials and some other food commodities.
He also said that a falling export growth of readymade garments, the main export product of the country, had dented the overall export earnings in recent months.
The slower growth in the export earnings will put an adverse impact on the country’s efforts to achieve desirable GDP growth this financial year, he pointed out.
The country’s current account balance registered a deficit of $1.38 billion in the first nine months of FY17 against a surplus of $3.45 billion in the same period of FY16 due to a negative growth in trade balance, services and primary income.
The current account balance, the gap between export receipts and net earnings in services (including remittances and import payments and profit repatriation by multinationals and local people), has been in the negative territory for the last few months.
The BB official said a large deficit in current account balance would put a negative impact on the country’s macroeconomic situation in the coming months as the import payments increased significantly in recent months.
The slower growth in export earnings is the main cause of the large deficit in the current account balance.
The negative growth in the inward remittance also put an adverse impact on the current account balance, he said.
However, the BB data showed that the net foreign direct investment (FDI) increased by 31.27 per cent to $1.44 billion during period from that of $1.09 billion in the previous fiscal.
But, in the first nine months of FY17, medium-and long-term foreign loans decreased to $2.01 billion from $2.16 billion during the same period a financial year ago.
The financial account in the country’s balance of payments posted a surplus of $3.24 billion in the July-March period of FY17 from a surplus of $761 million during the same period of FY16.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
