The country’s trade deficit reduced by 9.24% in the first nine months of the current fiscal year (FY2018-19), thanks to rising export earnings against moderate import payments.
Between July and March, the deficit stood at $11.92 billion, down from $13.14 billion in the same period a year ago, according to the Bangladesh Bank (BB) data.
The trade deficit slightly fell compared to the previous year but it was still very high, noted Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
There were high imports last year due to various factors including capital flight while the import growth this year was lower than the export earning, he added.
Exports stood at $30.43 billion in the first nine months of 2018-19, up by 12.09% year-on-year. Imports rose by 5.13% to $42.36 billion, according to BB data.
In addition to the trade deficit in goods sector, the trade deficit in the service sector was also increasing, Ahsan H Mansur told the Dhaka Tribune, suggesting that to overcome this deficit, remittance and exports earning must be increased a lot.
He said that remittance earning was stable remaining in the same place for the last few years; it should be increased while more focus on diversifying export goods was needed.
In July-March, foreign direct investment (gross inflows) increased by 39.21% to $2.89 billion. Foreign direct investment was $2.08 billion in the same period of the previous fiscal year, according to the BB data.
Speaking to the Dhaka Tribune, AB Mirza Azizul Islam, a former adviser to a caretaker government, said that the “slight” increase in exports was a “positive sign”.
“On the other hand,” he mentioned, “import payments rose by only 5.13%, which does not carry a good message.”
“Private sector investment needs to be increased since our investment has remained stagnant,” he further said.
As of May 11, the country’s forex reserves reached $30.99 billion. It was $31.02 billion last month. The highest $33.68 billion reserves were recorded on September 5, 2017.
Bangladesh will be able to meet more than five months’ import payment bills with the existing reserves, said Bangladesh Bank officials.
The current account deficit decreased 34.73% year-on-year to $4.23 billion during July-March period of the current fiscal year. The current account deficit was at $6.48 billion in the same period of the previous fiscal year, according to the BB data.
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