The country’s trade deficit increased by 20.02 per cent in the first nine months of the current fiscal year because of rising import payment pressure on the economy.
According to Bangladesh Bank data, the trade deficit stood at $14.49 billion between July-March. During the period, imports increased six per cent from that of a year ago to $42.76 billion while exports rose by 0.06 per cent to $28.27 billion.
Dyeing and tanning materials imports soared up to 8.54 per cent year-on-year to $615 million in the first nine months of this fiscal year. Imports of yarn also rose 1.61 per cent to $1.52 billion, but staple fibre decreased 17.25 per cent to $733 million.
Import of the item stood at $1.9 billion in the first nine months, an increase of 41 per cent year-on-year.
Import of the raw material products for expansion of the investment sector declined 13 per cent to $2.63 billion in the July-March period.
The current account surplus stood at only $125 million in the nine months of FY’21, which was a $2.65 billion deficit in the same period of the last fiscal year. Such a surplus was $1.37 billion a month ago.
Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD) opined “Expanding the trade deficit is a good phenomenon for Bangladesh as the economy is largely as an import-driven one,” adding major imported items of industrial raw materials and food grains also surged in recent months.
In addition, the country’s major export destinations – North America and Europe are showing a good performance in tackling the coronavirus pandemic, meaning that demand will increase more there.
Although the economy now turns around from the depressed condition, the pace of new investment is highly feeble given the frail import record of capital machinery.
However, Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh said that the indicators of the central bank’s balance of payment did not show too much of a positive indication.
“The economy is recovering slowly as per the previous projection. But the time is yet to come to calculate the ongoing repercussions deriving from the ongoing restrictions on movement,” he added.