Bangladesh entered the trade deficit territory again in August after a month because of higher import payments and relatively lower export earnings, officials said Tuesday.
The country's overall trade deficit widened by more than 26 per cent to US$999 million in the July-August period of the current fiscal year (FY) 2014-15 from $790 million in the corresponding period of the previous fiscal year, according to the central bank statistics.
"The trade deficit may widen further in the coming months if the lower export growth continues," a senior official of the Bangladesh Bank (BB) told the FE.
The overall imports rose to $6.09 billion in the first two months of this FY from $5.78 billion in the corresponding period, while export earnings rose to $5.09 billion from $4.99 billion.
The overall imports increased significantly during the period under review mainly due to higher import of petroleum products, another BB official explained.
Fuel oils import increased by 49.05 per cent to $840.40 million during the period against $563.85 million of the corresponding period of the previous fiscal.
He also said the upward trend of overall imports may continue in the coming months if the political stability continues.
Bangladesh recorded a trade surplus in July last for the first time in its history because of lower import payments.
The trade surplus stood at $195 million in July, the first month of the FY 15 against a deficit of $129 million in the same month a year ago, the BB data showed.
On the other hand, the country's current account balance came down to $327 million in the first two months of the FY15 from $656 million in the same period of the previous fiscal.
Higher trade deficit pushed down the current account balance significantly despite rising trend of inward remittances, according to the central banker.
However, the overall balance of payments (BoP) rose to $782 million during the period under review from to $655 million in the corresponding period of the FY 14.
"The overall BoP may improve further in the coming months because of the healthy position of the country's foreign exchange reserve," the BB official observed.
He also said the healthy BOP position helps maintain a stable exchange rate of the local currency against the US dollar in the foreign exchange market.
Bangladesh's foreign exchange (forex) reserve rose to $22.18 billion Tuesday from $22.17 billion of the previous working day.
"We'll be able to settle around seven months' import bills with the existing forex reserve," the BB official noted.
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