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Bangladesh counts $1.81b trade gap in two months

Jul-Aug current account balance turns negative

FE Report | October 09, 2017 12:00:00

Bangladesh counted a US$1.81 billion worth of merchandise trade gap with the rest of the world in the very first two months of this fiscal, for hugely higher import payments than export earnings.

Statistics released by the central bank Sunday also showed that trade gap widened almost threefold and a half from the same period of the past fiscal year when it had amounted to $525 million.

Huge jump in import payments against modest export earnings led to the ballooning of the volume of trade deficit.

Import, in free-on-board (FoB) terms, registered almost 34 per cent growth while the export (in FoB value) posted 14.57 per cent growth in the July-August period of the current fiscal year (FY) 2017-18.

Trade gap in services also widened to $778 million during the period as against $551 million.

The Bangladesh Bank statistics further showed that current-account balance turned negative at $451 million in the period under review, which was significantly positive at $812 million.

Higher trade gap pushed the current-account deficit to surge at a wider margin. Current account generally measures the balance of the regular external transactions of a country.

Preliminary estimation also shows that gross inflow of Foreign Direct Investment (FDI) increased by 8.51 per cent to $510 million in the period while net inflow increased by 9.60 per cent to $320 million.

The overall balance in the country's external account dropped into a negative territory of $206 million in the period under review from a surplus of $1176 million in the same period of FY17.

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