Overall trade deficit rises to $6.3b in FY '08
Shakhawat Hossain | Tuesday, 29 July 2008
The country's overall trade deficit rose to record $6.36 billion in the just concluded fiscal, up by 28 per cent from $4.97 billion in 2006-07, commerce ministry officials said Monday.
According to the provisional estimate of the ministry, the country imported goods worth $20.37 billion against its export earnings of $14.01 billion in 2007-08 fiscal that witnessed two major floods and unabated global price hike of major commodities.
In 2006-07 fiscal, the country faced a trade deficit of $4.97 billion after exporting products worth $12.18 billion against the import of goods worth $17.15 billion, they said.
The highest ever trade deficit has been attributed to 385 per cent increase in rice import during 2007-08 and global price hike of all commodity products including the other food items and fuel oils.
"Rice worth $860 million was imported in 2007-08. The amount was only $173 million in 2006-07," said a senior commerce ministry official.
He said the country consumed less petroleum products in the concluded fiscal but made 12 per cent higher payment due to almost 100 per cent jump in price of crude oils in the international market.
The import of petroleum products reached $2.29 billion in 2007-08 compared to $2.03 billion in 2006-07.
The country had to scale up import of rice to meet local production shortfall due to two rounds of flooding during July-August period and a devastating cyclone Sidr in November 2007.
According to the estimates of the finance ministry and donor agencies, rice worth more than $600 million was lost to the floods and the cyclone.
Besides rice, the country had to make higher payments for others items like wheat, edible oil, milk powder, fertiliser, iron and chemicals. According to the central bank statistics, the import of food grains and other consumer goods went up by 143 per cent and 45 per cent respectively over the previous fiscal.
The import of food grains stood at $1.411 billion in the concluded fiscal against $581.76 million in 2006-07, said the central bank data.
A central bank official said the widening trade deficit due to higher import of consumer and food items is not healthy as such imports do not contribute to the country's productive and export sector.
Trade deficit due to higher import of raw materials, intermediate goods and capital machineries indicates positive signals for the economy and its growths, said the official.
Import of industrial raw materials witnessed nearly 30 per cent growth to $7.688 billion in 2007-08 over $5.948 billion in 2006-07.
Intermediate goods worth $1.76 billion were imported in 2007-08, compared to $1.36 billion in the previous fiscal year.
But the growth is mainly for the price hike of raw materials in the international market, said the official.
In quantity, he said, the growth of raw and intermediate materials will not be significant.
According to the provisional estimate of the ministry, the country imported goods worth $20.37 billion against its export earnings of $14.01 billion in 2007-08 fiscal that witnessed two major floods and unabated global price hike of major commodities.
In 2006-07 fiscal, the country faced a trade deficit of $4.97 billion after exporting products worth $12.18 billion against the import of goods worth $17.15 billion, they said.
The highest ever trade deficit has been attributed to 385 per cent increase in rice import during 2007-08 and global price hike of all commodity products including the other food items and fuel oils.
"Rice worth $860 million was imported in 2007-08. The amount was only $173 million in 2006-07," said a senior commerce ministry official.
He said the country consumed less petroleum products in the concluded fiscal but made 12 per cent higher payment due to almost 100 per cent jump in price of crude oils in the international market.
The import of petroleum products reached $2.29 billion in 2007-08 compared to $2.03 billion in 2006-07.
The country had to scale up import of rice to meet local production shortfall due to two rounds of flooding during July-August period and a devastating cyclone Sidr in November 2007.
According to the estimates of the finance ministry and donor agencies, rice worth more than $600 million was lost to the floods and the cyclone.
Besides rice, the country had to make higher payments for others items like wheat, edible oil, milk powder, fertiliser, iron and chemicals. According to the central bank statistics, the import of food grains and other consumer goods went up by 143 per cent and 45 per cent respectively over the previous fiscal.
The import of food grains stood at $1.411 billion in the concluded fiscal against $581.76 million in 2006-07, said the central bank data.
A central bank official said the widening trade deficit due to higher import of consumer and food items is not healthy as such imports do not contribute to the country's productive and export sector.
Trade deficit due to higher import of raw materials, intermediate goods and capital machineries indicates positive signals for the economy and its growths, said the official.
Import of industrial raw materials witnessed nearly 30 per cent growth to $7.688 billion in 2007-08 over $5.948 billion in 2006-07.
Intermediate goods worth $1.76 billion were imported in 2007-08, compared to $1.36 billion in the previous fiscal year.
But the growth is mainly for the price hike of raw materials in the international market, said the official.
In quantity, he said, the growth of raw and intermediate materials will not be significant.