Trade deficit widens as exports fall
Tuesday, 9 June 2009
FHM Humayan Kabir
The country's trade deficit increased by US$200 million in first ten months of the current fiscal due to the global economic meltdown effects on the country's major export earning sectors, officials said.
The gap between earnings from import and export during the July-April period of the current fiscal is estimated at $5.39 billion as against $5.19 billion in the same period of the last fiscal, according to official data.
The trade deficit was more during the period under review despite substantial fall in prices of commodities in the international market.
During the first 10-month period of FY2009, the total shipment of the Bangladesh-made products was worth of $12.816 billion as against the import of goods worth $18.21 billion.
In the same period of the last fiscal, the export earning was $11.36 billion against the import payments of $16.56 billion, official statistics said.
Trade analysts and executive director of a private think tank --Centre for Policy Dialogue (CPD)-- Mustafizur Rahman said the trade deficit might rise further in the remaining months of the current fiscal as the second round of the global recession has started taking its toll on the country's economy.
"Global prices of different commodities, including fuel oil, are again on the rise. On the contrary, month-to-month earning from exports has been shrinking. Bangladesh has to pay more in import bills, leading to further boost to trade deficit." he told the FE.
Mr. Rahman expressed the fear that the balance of payments was likely to come under pressure in the next financial year with the possible decline in earning from exports and remittance.
"Bangladesh should get itself prepared to face more trade deficit in the coming days," he said.
Though the export of knitwear products maintained more than 30 per cent growth a year ago it shrunk to only 19.08 per cent in July-April of the FY09. This is considered a major setback to foreign exchange earnings.
Besides, the shipments of second largest export item-- frozen food, pharmaceuticals, jute and jute goods, and leather have been dropping every month. Rahman said Bangladesh must diversify its export base as well as the export markets immediately to weather the impact of the global economic contagion.
"The ready-made garment exporters should target some unexplored markets like Australia and Japan," he said adding that some sector like shipbuilding should be patronized sufficiently.
A central bank official said Bangladesh is unlikely to achieve its $16.3 billion export target set for the current financial year.
The country's trade deficit increased by US$200 million in first ten months of the current fiscal due to the global economic meltdown effects on the country's major export earning sectors, officials said.
The gap between earnings from import and export during the July-April period of the current fiscal is estimated at $5.39 billion as against $5.19 billion in the same period of the last fiscal, according to official data.
The trade deficit was more during the period under review despite substantial fall in prices of commodities in the international market.
During the first 10-month period of FY2009, the total shipment of the Bangladesh-made products was worth of $12.816 billion as against the import of goods worth $18.21 billion.
In the same period of the last fiscal, the export earning was $11.36 billion against the import payments of $16.56 billion, official statistics said.
Trade analysts and executive director of a private think tank --Centre for Policy Dialogue (CPD)-- Mustafizur Rahman said the trade deficit might rise further in the remaining months of the current fiscal as the second round of the global recession has started taking its toll on the country's economy.
"Global prices of different commodities, including fuel oil, are again on the rise. On the contrary, month-to-month earning from exports has been shrinking. Bangladesh has to pay more in import bills, leading to further boost to trade deficit." he told the FE.
Mr. Rahman expressed the fear that the balance of payments was likely to come under pressure in the next financial year with the possible decline in earning from exports and remittance.
"Bangladesh should get itself prepared to face more trade deficit in the coming days," he said.
Though the export of knitwear products maintained more than 30 per cent growth a year ago it shrunk to only 19.08 per cent in July-April of the FY09. This is considered a major setback to foreign exchange earnings.
Besides, the shipments of second largest export item-- frozen food, pharmaceuticals, jute and jute goods, and leather have been dropping every month. Rahman said Bangladesh must diversify its export base as well as the export markets immediately to weather the impact of the global economic contagion.
"The ready-made garment exporters should target some unexplored markets like Australia and Japan," he said adding that some sector like shipbuilding should be patronized sufficiently.
A central bank official said Bangladesh is unlikely to achieve its $16.3 billion export target set for the current financial year.