Despite the decrease in import payments, the country’s trade deficit soared by 17.32 per cent to $ 5.70 billion in the first eight months of the current financial year compared to the same period of FY2010-11 due to falling export growth.
The current account balance from July to February also declined by 31.83 per cent year on year but the balance continued to remain in positive zone for the sake of double digit remittance growth in the period.
A Bangladesh Bank official said a fall in imports in the first eight months could not help much in narrowing the trade gap amid a sharp decline in export growth.
According to Bangladesh Bank data released on Monday, the country’s import payments surged to $ 21.70 billion against exports worth $ 16 billion in July-February in the current FY2011-12.
In the first eight months this year, import grew by 14.44 per cent against 41.92 per cent in the same period last year.
However, during the period this year, exports rose by 13.45 per cent, while the growth was around 40.42 percent last year.
The total trade gap was $ 4.85 billion in July-February FY2010-11 whereas the trade gap in the first eight months of the current financial year stood at $ 5.70 billion.
Import of food, raw materials and capital machinery went down but that of petroleum marked a sharp rise in the first eight months.
According to BB data released in previous week, petroleum import increased by 49.63 percent in the first eight months of the current fiscal year. Such growth was 50.05 per cent during the same period last year.
LC opening for petroleum import soared by 97.50 per cent in the first eight months of this year. Such growth was 10.11 per cent during the same period last financial year.
AB Mirza Azizul Islam, former adviser to the past interim government, told New Age on Monday that the trade gap soared mainly due to continuing huge import of fuel oils by the government for running the costly rental power plants.
He said that import growth of petroleum in July-February of the current financial year was slightly lower than that of the same period of FY 2010-11.
But the petroleum import growth in FY 2009-10 was not high like in FY 2010-11 and FY 2011-12 as the government did not start the quick rental power plants at that time, he said.
The trade deficit may increase more in the next month due to lower import growth in March 2012 compared to the same period of the previous year, he said.
The current account balance or the difference between the country’s saving and its investment in July-February of FY2011-12 came down to $ 681 million, or declined by 31.83 per cent, from that of $ 999 million in the same period of FY2010-11.
Despite a double digit growth in remittance in the first eight months, the current account balance decreased because of a lower growth of the foreign direct investment into the country.
BB data showed that the FDI in July-February had stood at $ 490 million or 0.62 per cent higher against $ 487 million in the corresponding period of the previous year.
Moreover, foreign aid and grants also significantly diminished recently which negatively hampered current account balance, officials said.
The BB official said that trade gap has made a negative impact on the country’s forex reserve which has now come down to $9.67 billion from the $10 billion-mark after import bills payment to Asian Clearing Union in the first week of the March. The forex reserve which hit a record $11.32 billion in March 2011 continued to remain lower due to the higher import bills payment by the government, they said.
Source: The New Age, Tue, 10/04/2012
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