Trade deficit to surpass $10 billion

Trade deficit for the outgoing fiscal is poised to surpass all previous records although fuel prices went down by half. The deficit widened because of the sharp rise in imports. The trade deficit stood at $8.5 billion at the end of April, which is 25 per cent more than last fiscal and 54.18 per cent higher compared with the same period in the last fiscal. Economist Zaid Bakht predicts it would cross the $10 billion mark, but agrees with the Bangladesh Bank governor by saying the rise in deficit is a positive sign for the economy.
Until April, central bank’s records show imports stood at $33.46 billion, a 12.19 per cent increase from the same period last year. Export earnings amounted to $24.96 billion, which is 2.67 per cent higher on a point-to-point basis with the last fiscal. “In ten months, trade deficit stood at $8.5 billion. Considering the hike of imports recently, it is more or less certain that the trade deficit would go beyond $10 billion by the end of the fiscal,” Bakht added.
The Bangladesh Institute of Development Studies (BIDS) research director further said capital machinery and industrial raw materials made up most for the rise in imports. “It would help increase investments.” Central bank Governor Atiur Rahman said a rising import cost, even when international fuel and food prices are low, implies that investment is on the rise. He added that the forex reserve currently stands at $24 billion, which is good enough to pay import bills for another seven months, according to bdnews24.com.