Bangladesh trade deficit widens as imports soar
Saturday, 3 March 2012
Bangladesh's trade deficit widened by more than $1.1 billion in July-January due to soaring oil import costs at a time when a cooling global economy is sapping demand for its key garment exports, reports Reuters.
In July-January, the first seven month of current fiscal year, imports rose 15.6 per cent to $21.14 billion, while exports rose 14.3 per cent to $13.92 billion, the central bank data showed. The trade deficit was $7.2 billion.
Bills for imports, notably oil for power generation, soared, while demand for exports such as readymade garments was limited by the global economic slowdown and the euro zone debt crisis, a senior central bank official said.
The balance of payments situation is likely to improve in the coming months as the central bank tightened credit growth which curbs imports of luxury items while expatriate Bangladeshis are sending home more money, he said.
Bangladesh in January received a record monthly high of $1.2 billion in remittances from citizens abroad, taking the total to nearly $7.3 billion since July. And the central bank expects remittances to cross the $12 billion threshold in the current fiscal year ending in June.
On the back of strong remittances and an improving trade balance, the foreign exchange reserves rose to $10.07 billion at the end of February, the highest since November.
The current account also turned positive in December after staying in the red for two months.
In July-January, the first seven month of current fiscal year, imports rose 15.6 per cent to $21.14 billion, while exports rose 14.3 per cent to $13.92 billion, the central bank data showed. The trade deficit was $7.2 billion.
Bills for imports, notably oil for power generation, soared, while demand for exports such as readymade garments was limited by the global economic slowdown and the euro zone debt crisis, a senior central bank official said.
The balance of payments situation is likely to improve in the coming months as the central bank tightened credit growth which curbs imports of luxury items while expatriate Bangladeshis are sending home more money, he said.
Bangladesh in January received a record monthly high of $1.2 billion in remittances from citizens abroad, taking the total to nearly $7.3 billion since July. And the central bank expects remittances to cross the $12 billion threshold in the current fiscal year ending in June.
On the back of strong remittances and an improving trade balance, the foreign exchange reserves rose to $10.07 billion at the end of February, the highest since November.
The current account also turned positive in December after staying in the red for two months.