The country's overall trade deficit widened by 60.23 per cent to US$5.541 billion in the last fiscal due to price hike of essential items, including fuel and foodgrains, in the global market.
The higher trade deficit pushed the country's overall balance of payments (BoP) surplus down to $604 million in the fiscal 2007-'08 (FY'08) from $1.493 billion of the previous fiscal, according to the central bank statistics.
"Higher prices of most of the essential items, including foodgrains and petroleum products, in the international market have pushed the trade deficit further high," a senior official of the Bangladesh Bank (BB) told the FE Thursday.
He also said import of foodgrains in substantial quantities was also responsible for the widening trade deficit in the last fiscal.
The overall trade deficit rose to $5.541 billion in FY'08 from $3.458 billion of the previous fiscal. In FY'08, export earnings stood at $13.945 billion against the import payments of $19.486 billion, the BB's data showed.
"Despite larger deficit in trade balance the current account balance recorded a surplus of $672 million during FY'08 against the surplus of $936 million during FY'07 due mainly to larger current transfers of $8.743 billion," the central bank said in its Major Economic Indicators: Monthly Update for August, 2008.
The overall balance of payments, however, recorded a surplus of $604 million in FY'08 as against a surplus of $1.493 billion of the previous fiscal due to surplus in current account and capital account amounting to $672 million and $576 million respectively, the Update said.
The country's overall balance of payments is maintaining a surplus trend following higher inflow of remittances and foreign aid, officials said.
Bangladesh received $7.939 billion worth of remittances during FY'08 against $5.978 billion in the previous fiscal, the central bank said.
Meanwhile, the flow of net foreign direct investment (FDI) came down to $650 million in FY'08 from $793 million of the previous fiscal.
The portfolio investment also dropped to $48 million in FY'08 from $106 million of the previous fiscal, according to the statistics.
The net receipts of foreign aid were recorded higher at $1.376 billion in FY'08 against $1.099 billion of the previous fiscal, thanks to the huge assistance of donors for the flood and cyclone victims, the statistics said.
