Bangladesh trade deficit widens to 13.20 bln USD as imports surge

DHAKA, May 18 (Xinhua) — Bangladesh‘s trade deficit in the first quarter of the current 2017-18 fiscal year (July 2017-June 2018) ballooned by over 87 percent year on year to 13.20 billion U.S. dollars, showed the central bank data on Thursday.
Bangladesh import payment was 40.30 billion dollars, up 24.50 percent, in the first nine months of the fiscal year 2017-18 while earnings from exports stood at 27.09 billion dollars, up 6.98 percent, during the same period, showed the BangladeshBank (BB) data.
The country’s gap between export earnings and import payments during the July-March period of 2016-17 fiscal year (July 2016-June 2017) was estimated at 7.04 billion U.S. dollars.
On the back of an increase in specially rice imports,the central bank statistics showed trade deficit surged 46 percent to 9.47 billion U.S. dollars in the last fiscal year compared to a year earlier.
The increased trade gap also put pressure on the current account, creating a skyrocketing deficit in the first nine months of this fiscal year.
Bangladesh saw the rapid current account deficit apparently due to rapid growth in imports.
The deficit in the current account stood at 7,083 million U.S. dollars in the first nine months of the fiscal, in contrast with a deficit of 1,372 million U.S. dollars in the same period a year ago, showed the central bank data posted on its website recently.
On the back of an increase in imports, a BB official who did not like to be named said current-account deficit continued to rise sharply since last year.
He said imports of construction materials rose largely as Bangladesh has been implementing some quite big infrastructure projects like 6.15-km Padma bridge worth billions of U.S.dollars.
Apart from this, the official said rising price of oil on the world market and importing a significant amount of rice in an effort to replenish reserves and rein in prices of the staple in the wake of the last year’s floods have also led to the skyrocketing imports .
Officials said Foreign direct investment (FDI)  and strong remittances from nearly 10 million Bangladeshis, living and working abroad, helped offset the impact of the trade shortfall.
According to the provisional BB data, Bangladesh received 10.76 billion U.S. dollars in remittances during the July- March period of the fiscal 2017-18 (July 2017- June 2018), which is about 17 percent higher over the corresponding period of the last fiscal year.
Although the overall amount of foreign direct investment (FDI) in the first three quarters of the fiscal year to Bangladesh fell slightly, but helped the country maintain its macroeconomic stability.
According to the BB data, FDI inflow in the country over the last nine months from July to March stood at 2,250 million U.S. dollars against 2,394 million U.S. dollars in the same period a year earlier.
But they (remittances and FDI) were not enough to keep the overall balance of payments in surplus as always.   Enditem [testimonial category=”TESTIMONIAL_CATEGORY” size=”1/1″ type=”static”]