bdnews24.com :
Trade deficit for the outgoing fiscal is poised to surpass all previous records although fuel prices went down by half.
The deficit widened because of the sharp rise in imports. With two months left, the deficit stood at $8.5 billion at the end of April, which is 25 percent more than last fiscal and 54.18 percent higher compared with the same period in the last fiscal.
Economist Zaid Bakht predicts it would cross the $10 billion mark, but agrees with the Bangladesh Bank governor by saying the rise in deficit is a positive sign for the economy.
Until April, central bank’s records show imports stood at $33.46 billion, a 12.19 percent increase from the same period last year.
Export earnings amounted to $24.96 billion, which is 2.67 percent higher on a point-to-point basis with the last fiscal. “In ten months, trade deficit stood at $8.5 billion. Considering the hike of imports recently, it is more or less certain that the trade deficit would go beyond $10 billion by the end of the fiscal,” Bakht told this new agenc.
The Bangladesh Institute of Development Studies (BIDS) research director further said capital machinery and industrial raw materials made up most for the rise in imports.
“It would help increase investments.” Central bank Governor Atiur Rahman said a rising import cost, even when international fuel and food prices are low, implies that investment is on the rise.
He added that the forex reserve currently stands at $24 billion, which is good enough to pay import bills for another seven months.
“Import of capital machinery, raw materials and other industrial materials rose as the country is stable. This has cause a deficit in the balance of payment.
“But there is nothing to be worried as we have enough reserves to meet the import costs.” Bakht, chairman of state-run Agrani Bank, said, “Scope for cheaper imports from Europe has opened up as the Euro fell and the Bangladeshi businesses are grabbing that opportunity.”
The high trade gap has also caused a high deficit in balance of payments (BoP). It stands at $1.64 billion in Jul-May of the ongoing fiscal, which was $1.54 billion during the last fiscal’s same period.
BoP is the method to monitor all international monetary transactions at a specific period. All trades conducted by both the private and public sectors are accounted for in the BoP to keep a tab on how much money is going in and out of a country.
There was a surplus in the BoP until August last year- the current fiscal’s second month, but from September it took a U-turn and been in the negative territory since then.
After incurring losses for the last five fiscals, the Bangladesh Petroleum Corporation (BPC) is set to make profits this year.
BPC Chairman AM Badrudduja told bdnews24.com that it cost the state-owned oil entity Tk 380 billion in FY 2013-14 to import oil, which will come down to between Tk 170 and 180 billion this fiscal as international prices slumped.
He added that the BPC has started to make profit from December last year. According to figures by the Bangladesh Economic Review 2015, BPC reaped profits of Tk 34.54 billion until Apr 22 of FY 2013-14. During the same period of the last fiscal, it counted a loss of Tk 23.21 billion.
The last time BPC saw profits was in FY 2008-09 during the military-installed caretaker government’s regime.
Since then, other than the profit of Tk 3.226 billion in that fiscal, the BPC has incurred losses.
Until December, 2014, the BPC’s is due in loans from the state-owned banks stands at Tk 111.53 billion.
Finance Minister AMA Muhith said that the BPC had turned in to ‘junk’ organisation as it had to buy oil in higher price and sell in a lower price. “We did not adjust oil price despite a drop in the international market to clear the BPC’s backlog,” he told bdnews24.com.
Trade deficit for the outgoing fiscal is poised to surpass all previous records although fuel prices went down by half.
The deficit widened because of the sharp rise in imports. With two months left, the deficit stood at $8.5 billion at the end of April, which is 25 percent more than last fiscal and 54.18 percent higher compared with the same period in the last fiscal.
Economist Zaid Bakht predicts it would cross the $10 billion mark, but agrees with the Bangladesh Bank governor by saying the rise in deficit is a positive sign for the economy.
Until April, central bank’s records show imports stood at $33.46 billion, a 12.19 percent increase from the same period last year.
Export earnings amounted to $24.96 billion, which is 2.67 percent higher on a point-to-point basis with the last fiscal. “In ten months, trade deficit stood at $8.5 billion. Considering the hike of imports recently, it is more or less certain that the trade deficit would go beyond $10 billion by the end of the fiscal,” Bakht told this new agenc.
The Bangladesh Institute of Development Studies (BIDS) research director further said capital machinery and industrial raw materials made up most for the rise in imports.
“It would help increase investments.” Central bank Governor Atiur Rahman said a rising import cost, even when international fuel and food prices are low, implies that investment is on the rise.
He added that the forex reserve currently stands at $24 billion, which is good enough to pay import bills for another seven months.
“Import of capital machinery, raw materials and other industrial materials rose as the country is stable. This has cause a deficit in the balance of payment.
“But there is nothing to be worried as we have enough reserves to meet the import costs.” Bakht, chairman of state-run Agrani Bank, said, “Scope for cheaper imports from Europe has opened up as the Euro fell and the Bangladeshi businesses are grabbing that opportunity.”
The high trade gap has also caused a high deficit in balance of payments (BoP). It stands at $1.64 billion in Jul-May of the ongoing fiscal, which was $1.54 billion during the last fiscal’s same period.
BoP is the method to monitor all international monetary transactions at a specific period. All trades conducted by both the private and public sectors are accounted for in the BoP to keep a tab on how much money is going in and out of a country.
There was a surplus in the BoP until August last year- the current fiscal’s second month, but from September it took a U-turn and been in the negative territory since then.
After incurring losses for the last five fiscals, the Bangladesh Petroleum Corporation (BPC) is set to make profits this year.
BPC Chairman AM Badrudduja told bdnews24.com that it cost the state-owned oil entity Tk 380 billion in FY 2013-14 to import oil, which will come down to between Tk 170 and 180 billion this fiscal as international prices slumped.
He added that the BPC has started to make profit from December last year. According to figures by the Bangladesh Economic Review 2015, BPC reaped profits of Tk 34.54 billion until Apr 22 of FY 2013-14. During the same period of the last fiscal, it counted a loss of Tk 23.21 billion.
The last time BPC saw profits was in FY 2008-09 during the military-installed caretaker government’s regime.
Since then, other than the profit of Tk 3.226 billion in that fiscal, the BPC has incurred losses.
Until December, 2014, the BPC’s is due in loans from the state-owned banks stands at Tk 111.53 billion.
Finance Minister AMA Muhith said that the BPC had turned in to ‘junk’ organisation as it had to buy oil in higher price and sell in a lower price. “We did not adjust oil price despite a drop in the international market to clear the BPC’s backlog,” he told bdnews24.com.
