Trade deficit drops by 23pc in July-Oct
Stands at $1.92 billionAKM Zamir Uddin
The country’s trade deficit declined to $1.92 billion in July-October of the current fiscal year from $2.51 billion in the corresponding period of the FY 2012-13, Bangladesh Bank data showed.
According to the data released on Wednesday, the deficit went down by 23.40 per cent in the first four months of the FY14 compared with that of 20.84 per cent fall in the same period of the FY13.
A BB official told New Age that the trade deficit narrowed due to rise in exports and drop in imports.
He, however, said that the narrowed trade gap would not put much positive impact on the country’s macro-economic situation if the imports of industrial raw materials and capital machinery would not increase.
The exports posted a robust growth in the first four months of the FY14, but the growth of import payments failed to achieve an expected level in the period due to a stagnant situation in the investment sector amid political unrest.
The BB data, however, showed that the import increased in July-October of the FY14 due mainly to a rise in imports of food products as the businesspeople moved to build stocks of food grains amid a decreased production of rice in the FY13.
The imports registered a 7.49-per cent growth in the first four months of the FY14 compared with that of a 4.07-per cent negative growth in the corresponding period of the FY13.
The import payment stood at $11.55 billion in July-October of the FY14 while it was $10.75 billion in the same period of the FY13.
The country’s export earnings increased by 16.93 per cent in the first four months of the FY14 compared with that of 2.58 per cent growth in the same period of the FY13.
The export earnings stood at $9.62 billion in the first four months of the FY14 and it was $8.23 billion during the same period of the FY13.
The BB official said that an unfavourable business situation was now prevailing in the country due to the recent political violence which had already put an adverse impact on the investment sector.
The businesspeople have recently adopted a ‘wait and see’ approach to expanding their business by taking credit from the banks amid the political unrest, he said.
Under the circumstances, the businessmen felt discouraged to import products from abroad and the trend hit the productive sector, he said.
The BB data, however, showed that the service sector trade deficit increased by 16.99 per cent to $1.29 billion in July-October of the FY14.
In the first four months of the FY14, the country received $1.01 billion from the service sector but it paid foreign sources $2.31 billion during the same period of the FY13.
The current account balance declined by 2.77 per cent in the first four months of the FY14 from that in the same period of the FY13 due mainly to lower inward remittance.
The current account balance decreased to $701 million in July-October of the FY14 from $721 million in the same period of the FY13.
The BB data showed that the inward remittance registered a negative growth of 10.09 per cent in the first four months of the FY14 from that in the same period of the FY13.
The expatriate Bangladeshis sent $4.46 billion in July-October of the FY14 against $4.96 billion during the same period of the FY13.
Net foreign direct investment increased by 1.32 per cent to $538 million in the first four months of the FY14 from that of $531 million in the same period of the FY13.
The country’s overall balance dropped by 14.24 per cent to $1.64 billion in the first four months of the FY14 against $1.92 billion during the same period of the FY13 due to a declining trend in capital and financial accounts.
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