Bangladesh's trade deficit crossed US$ 2.0 billion in the first two months of the current fiscal year (FY), 2018-19, mainly due to its higher import payments than lower export receipts, officials said.
The gap in trade with the rest of the world rose to $ 2.11 billion in the July-August period of FY 19, from $ 1.77 billion in the same period of the previous fiscal.
The trade deficit registered a 19.31 per cent growth during the period under review, according to the latest statistics of Bangladesh Bank (BB), released on Sunday.
"The country's overall import volume increased, although with a decreasing trend, in the first two months of FY 19," a BB senior official told the FE while explaining the situation.
The overall import grew by 5.66 per cent during the July-August period of FY 19 against 33.95 per cent growth in the same period of FY 18, according to the central banker.
The import rose to $ 8.82 billion in the first two months of FY 19 from $ 8.35 billion in the same period a year earlier, the BB data showed.
In contrast, export earnings stood at $ 6.72 billion during the period under review against $ 6.59 billion in the same period.
"The trade deficit may reduce slightly in the coming months, if the rising trend of export earning continues," the central banker explained.
The overall export earnings jumped by 54.64 per cent to $ 3.14 billion in September 2018 from $ 2.03 billion in the same month of 2017, according to the data of Export Promotion Bureau (EPB).
Senior bankers, however, said the upward trend of import may continue in the coming months also mainly due to higher prices of petroleum products in the global market.
"Some products like LNG have been included in the list of importable items that has raised the overall import payment pressure on the economy," Syed Mahbubur Rahman, Chairman of Association of Bankers, Bangladesh (ABB), told the FE.
Talking to the FE, another BB official said lower import growth along with upward trend of inward remittance has helped to reduce trade deficit during the period under review.
Meanwhile, the country's current-account deficit came down to $ 60 million during the July-August period of FY 19 against $ 369 million a year ago.
The inward remittance flow increased by 8.39 per cent to $ 2.69 billion in the first two months of this fiscal from $ 2.48 billion in the same period of FY 18.
The country's overall balance of payments (BoP) entered into positive territory during the period following lower current-account deficit and surplus in financial account, the BB official said.
BoP reached $ 156 million in the first two months of FY 19 against $ 206 million deficit in the same period of the previous fiscal.
Surplus in financial account rose to $ 473 million during the July-August period of FY 19 from $ 402 million a year before.
The higher inflow of medium and long-term loans helped to maintain the surplus position of financial account, the central banker noted.
He also said higher inflow of foreign direct investment (FDI) has also pushed up surplus in financial account.
The country's gross FDI inflow grew by 7.87 per cent to $ 480 million in the first two months of FY 19 from $ 445 million in the same period of FY 18, the BB data showed.
Besides, net FDI inflow increased 7.46 per cent to $ 216 million from $ 201 million.
Selim Raihan, Executive Director of South Asian Network on Economic Modeling (SANEM), termed the BoP improvement as a temporary relief.
He opined that import monitoring should be strengthened along with boosting export earnings to maintain such development.
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