Trade deficit widens further

The country's overall trade deficit widened further because of higher import payments and relatively lower export growth, officials said Thursday.

The trade deficit rose to US$ 4.94 billion in the July-March period of this fiscal year (FY), 2013-14, from $3.56 billion in the July-February period. It was $2.79 billion in the July-January period of the same fiscal.

"The trade deficit may widen further in the coming months, if the existing trend in foreign trade persists," a senior official of the Bangladesh Bank (BB) told the FE.

The overall imports increased significantly mainly due to higher import of food grains and petroleum products, another central banker explained.

The country's overall imports increased by 30.61 per cent to $3.44 billion in March from $2.63 billion in the same period of the previous year, the BB data showed.

"We assume that the existing upward trend of imports will continue in the coming months ahead of the holy Ramadan," the central banker noted.

Normally, a large quantity of essential commodities is imported to meet the additional demand of consumers during Ramadan, the month of fasting.   

However, the overall trade deficit rose to $4.94 billion in the July-March period of the FY 14 from $4.86 billion in the corresponding period of the previous fiscal, the BB data showed.

The overall imports rose to $26.91 billion in the first nine months of this FY from $24.22 billion in the corresponding period, while export earnings rose to $21.96 billion from $19.36 billion.

On the other hand, the country's current account balance came down to $1.52 billion in July-March period of the FY 14 from $2.61 billion due to lower growth of inward remittance, according to the BB officials.

The overall balance of payments (BoP) also came down to $3.88 billion during the period under review from $3.9 billion in the corresponding period.

"The overall BoP may increase in the coming months because of a healthy position of the country's foreign exchange reserve," the BB officials observed.

Bangladesh's foreign exchange (forex) reserve rose to $19.60 billion Thursday from $19.50 billion of the previous working day.

"We'll be able to settle around six months' import bills with the existing forex reserve," they noted.