The country’s trade deficit increased by 110.87 per cent to $2.36 billion in the first quarter of the current financial year of 2016-17 compared with that of $1.12 billion in the corresponding period of the FY16.
The deficit ballooned during the period due to lower export earnings against higher import payments.
According to the latest Bangladesh Bank data, the export earnings posted a 3.52-per cent growth in the July-September period of the FY17 compared with that in the same period a fiscal year ago.
The export earnings stood at $7.90 billion in the first three months of the FY17 while the earnings were $7.64 billion in the same period of the previous fiscal year.
The imports registered a growth of 17.27 per cent in the July-September period from that in the first quarter of the FY16.
The import payment stood at $10.27 billion in the first three months of the FY17 while it was $8.76 billion in the corresponding period a year ago.
A BB official told New Age on Tuesday that the country’s trade deficit increased significantly in the first three months of the FY17 as the import payments increased to a great extent.
He said that the import payments increased in the first quarter of this fiscal year as the central bank earlier asked the banks not to keep LCs unsettled for long.
As the BB observed that a number of banks were not settling LCs in due time it issued letter to managing directors and chief executive officers of all banks in July asking them to settle the pending LCs in the shortest possible time.
For this reason, the banks heavily settled their pending LCs in the months of August and September that eventually increased the overall import payments in the first quarter of the FY17.
The BB official said the ease of political unrest and uncertainty in recent period encouraged the businesspeople to import more capital machinery and industrial raw materials in the first quarter of the FY17.
The businesspeople earlier adopted a go-slow policy towards expanding their enterprises, but they have recently started expanding their business, he said.
The country, however, failed to achieve its expected export earnings in the first quarter as the government set an export earnings target at $8.94 billion for the July-September period of this fiscal year.
Under the circumstances, the country’s trade deficit increased significantly in the first three months of this fiscal year.
The current account balance, the gap between export receipts and net earnings in services including remittances and import payments and profit repatriation by multinationals and local people, registered a deficit amount of $504 million in the first quarter of the FY17 from a surplus amount of $1.66 billion in the same period a fiscal year ago.
The BB official said that the higher import payment and lower inward remittances had put an adverse impact on the country’s current account balance.
The BB data showed that the country’s inward remittance decreased to $3.19 billion in the first quarter of the FY17 from $3.87 billion during the corresponding period of the FY16.
The net foreign direct investment increased by 8.45 per cent to $642 million in the July-September period from that of $592 million in the corresponding period of the FY16.
The BB data showed that the financial account of the country’s balance of payment posted a surplus of $2.04 billion in the first three months of the FY17 from $377 million during the same period of the FY16.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
The country’s overall balance decreased by 9.23 per cent to $1.78 billion in the July-September period against $1.97 billion during the same period of the FY16 due to its lower position in the current account balance, the BB data showed.
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