July-Aug trade deficit rises

Country's overall trade deficit increased slightly in the first two months of the current fiscal year (FY) 2016-17 for higher import payments against relatively lower export earnings, officials said.
The trade deficit rose by 5.0 per cent or US$25 million to $525 million during the July-August period in FY 17 from $500 million in the same period of the last fiscal year, according to the central bank's latest statistics, released Sunday.
"The trade deficit may widen further in the coming months if the declining trend in the country's export earnings, as calculated in the month of September last by the Export Promotion Bureau (EPB), continues," a senior official of the Bangladesh Bank (BB) told the FE.
The overall export earnings fell by 5.63 per cent to $2.24 billion in September 2016 from $2.37 billion in the same month of 2015.
During the period under review, the country's overall import payments rose to $6.23 billion from $5.80 billion in the same period of the FY 16.
The trade gap due to imports outstripping exports affected a little bit the country's balance-of-payments situation.   
The central banker said the import payments may rise in the coming months also as implementation of different infrastructure-development projects, including Padma Bridge, is being expedited.
Currently, the government is implementing nine projects under a Fast Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina, for quick implementation.
The overall imports may rise further in the coming months as the import orders increased in August 2016, another BB official said.
The opening of fresh letters of credit (LCs) against import--generally known as import orders--increased by 22.60 per cent to $3.81 billion in August from $3.11 billion in July 2016.
On the other hand, the export earnings also stood at $5.71 billion in the first two months of this fiscal from $5.30 billion in the same period of the last fiscal, the BB data showed.
Trade deficit along with downtrend in inward remittances pushed down the current-account surplus during the period under review, the central banker explained.
The country's current-account balance came down to $700 million during the period under review from $1.34 billion in the same period of the FY 16.
The remittance inflow dropped by 15.65 per cent to $2.15 billion in the first two months of the FY 17 from $2.55 billion in the same period of the last fiscal.
However, the surplus in overall balance of payments (BoP) also came down to $1.19 billion during the period under review from $1.27 billion in the same period of the FY 16.
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