Trade deficit widens substantially in Feb

The country's overall trade deficit widened by nearly 28 per cent in the month of February last due mainly to higher import payments and relatively lower export revenue growth, officials said Sunday.
The overall trade deficit rose to US$3.56 billion in the July-February period of the fiscal year (FY) 2013-14 from $2.79 billion in the July-January period of the fiscal. It was $4.60 billion in the corresponding period of the previous fiscal year, according to the central bank statistics.
"The trade deficit widened significantly in the month of February 2014 over the previous month because of higher import payments than export earnings," a senior official of the Bangladesh Bank (BB) told the FE.
He also said the trade deficit may widen further in the coming months if the existing trend in foreign trade persists.
"The overall imports increased during the period under review mainly due to higher import of food gains, capital machinery and industrial raw materials," another BB official said.
He also said the existing upward trend of imports may continue in the coming months as political stability has started coming back in the country after holding of the parliamentary elections on January 5.
The country's current account balance rose to $2.02 billion in the first eight months of the FY 14 from 1.99 billion in the same period of the previous fiscal.
"Rising trend of inward remittance has contributed to the surplus position of current account balance despite widening of trade deficit during the period under review," the BB official noted.
However, the overall balance of payment (BoP) came down to $3.33 billion during the period under review from to $3.51 billion in the corresponding period of the FY 13. "The overall BoP may increase in the coming months because of the healthy position of the country's foreign exchange reserve," the central banker explained.
Bangladesh's foreign exchange (forex) reserve rose to $20.22 billion Sunday from $20.09 billion of the previous working day.
"We'll be able to settle more than six months' import bills with the existing forex reserve," the BB official noted.