The country’s trade deficit increased by 12.52 per cent to US$ 2.77 billion in the first four months of the current financial year of 2016-17 compared with that of US$ 2.46 billion in the corresponding period of FY16.
The deficit increased during the period due to lower export earnings against higher import payments.
According to the latest Bangladesh Bank data, the export earnings posted a 6.78-per cent growth in the July-October period of the FY17 compared with that of 3.85 per cent growth in the same period a fiscal year ago.
The export earnings stood at US$ 10.54 billion in the first four months of the FY17 while the earnings were US$ 9.87 billion in the same period of the previous fiscal year.
The imports registered a growth of 7.93 per cent in the July-October period compared with that of 1.72 per cent growth in the first four months of FY16.
The import payment stood at US$ 13.31 billion in the first four months of the FY17 while it was US$ 12.34 billion in the corresponding period a year ago.
A BB official told New Age on Tuesday that the country’s trade deficit increased in the first four months of FY17 as the import payments swelled in the recent period.
He said that the import payments mainly 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 four months of FY17.
The import payment, however, slightly decreased again in October, the BB data showed.
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 US$ 16 million in the first four months of FY17 from a surplus amount of US$ 1.24 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 posted a negative growth of 15.57 per cent in July-October of FY 17 compared with that of a negative growth of 0.58 per cent in the same period a financial year ago.
The inflow of inward remittance decreased to US$ 4.18 billion in the first four months of FY17 from US$ 4.96 billion during the corresponding period of FY16.
The net foreign direct investment increased by 9.07 per cent to US$ 577 million in the July-October period from that of US$ 529 million in the corresponding period of FY16.
The BB data showed that the financial account of the country’s balance of payment posted a surplus of US$ 1.54 billion in the first four months of FY17 from US$ 1.13 billion during the same period of FY16.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
The country’s overall balance increased by 6.44 per cent to US$ 2.06 billion in the July-October period against US$ 1.93 billion during the same period of FY16 due to its lower position in the financial account, the BB data showed.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Trade & Commerce