Trade deficit drops on higher export growth

The country's overall trade deficit recorded a declining trend in February following higher export growth than import payments, officials concerned said.
The overall trade deficit came down to US$4.06 billion during the July-February period of the current fiscal year (FY), 2015-16, from $4.07 billion during the same period of the previous fiscal, according to the central bank's latest statistics, released on Thursday.
The official data also showed that the trade deficit widened by nearly 5.0 per cent to $3.75 billion during the July-January period of FY 16 from $3.58 billion in the same period of FY 15.
"The trade deficit may shrink further in the coming months, as the export earnings are picking up gradually," a senior official of the Bangladesh Bank (BB) told the FE.
The central banker opined that the overall export growth will reach 10 per cent by the end of this fiscal.
The country's overall export earnings, including those of the export processing zones (EPZs), grew by 7.81 per cent to $21.58 billion during the July-January period of FY 16 from $20.01 billion during the same period of FY 15. The import payments rose to $25.63 billion from $24.08 billion, the BB data showed.
"The country's overall imports decreased in terms of value and not in terms of quantity mainly due to lower prices of commodities, including petroleum products, in the global market," the central banker explained.
Gap in services trade also declined to $1.74 billion during the period under review from $2.18 billion due to lower payments in services. Trade in services includes tourism, financial service and insurance.
However, current account balance rose to $2.71 billion in the July-February period of FY 16 from $2.20 billion in the same period of FY 15.
The rising trend of current account balance has continued in the recent months despite the falling trend in inward remittances, according to another central banker.
The flow of inward remittances fell by 2.02 per cent to $9.63 billion in the July-February period of FY 16 from $ 9.84 billion in the same period of the last fiscal.
On the other hand, fiscal account increased by more than 71 per cent to $905 million in the first eight months of this fiscal from $528 million during the same period of last fiscal.
The net inflow of foreign direct investment (FDI) rose by 27.19 per cent to $1.45 billion during the period under review from $1.14 billion during the corresponding period of FY 15.
Overall balance of payments (BoP) rose to $3.15 billion during the period under review from $2.22 billion in the same period of the previous fiscal.
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