Economic Reporter :
Lower export receipts and higher import payments have widened Bangladesh’s trade deficit to $1.36 billion in July, up from $85 million during the same month a year ago, according to Bangladesh Bank (BB) data.
Bangladesh’s export in July went down by over 11 percent, while import payments witnessed over 21 percent growth, which has broadened the trade deficit, a senior BB official said.
“We hope the gap will narrow down in August once the export-import data is available,” he said.
BB data shows Bangladesh’s trade deficit rose to record $22.8 billion in fiscal 2020-21, up from $17.85 billion a year ago, mainly because of negative growth in export earnings amid the coronavirus pandemic.
Closure of factories for 12 days due to holidays on the occasion of Eid-ul-Azha, one of the biggest religious festivals of the Muslims, and Covid restrictions were the key reasons for the export earnings fall, said exporters.
They, however, hoped that the country’s export would rebound in August as global buyers increased their orders amid the improving situation of the Covid pandemic.
Import payments increased by 21.63 per cent to $4.76 billion in July from $3.91 billion in the same month of the past year.
Businesses’ move to rebuild their industrial input stock was the main reason for the surge in import payments in the last few months amid major vaccination drives in the developed countries especially in the major export destinations for Bangladesh, businesses said.
The BB data also showed that the country’s gross foreign direct investment increased by 8 per cent to $3.23 billion in July-May of FY21 from $2.99 billion in the same period of FY20.
Along with the sharp increase, the country’s current account balance dropped sharply by $1.8 billion to $336 million in July from $2.14 billion in the same month of the past year.
In the country’s financial account, the country’s balance was $83 million in July against a deficit of $682 million in the same month of 2020.
The country’s net FDI increased by $33 million to $292 million in the first month of FY22 from $259 million in the same month of the previous fiscal year.
Withdrawal of investments from the capital market continued in the first month of FY22.
Foreign investors withdrew $16 million in portfolio investments from the stock market in July against their withdrawal of $37 million in the same month of the past year.
