Country’s trade deficit widened further in July, the first month of the current fiscal year (2018-2019), maintaining the last fiscal year’s trend, as import payments remained high.
As per the Bangladesh Bank data released on Wednesday, trade deficit in July of FY19 increased by 12.14 per cent to $1,173 million compared with that of $1,046 million in July of FY18.
Higher import payment was the key reason for the widening trade gap for the last two fiscal years, experts and Bangladesh Bank officials said.
A less-than-expected industrial growth in the country in the period, however, has raised suspicion that a section of importers laundered money in the name of imports, they said.
Recent media reports referring to the central bank investigation said that importers refrained from submitting proofs of imports of goods and machinery despite completion of payments, raising suspicion of money laundering.
Experts said that the BB should take strict measures with a view to preventing capital flights in the name of imports ahead of national polls due by January next year.
They said that continuation of heavy trade deficit would ultimately push inflation up and create pressure on the country’s economy as a whole.
Country’s trade deficit doubled in FY18 compared with that in the previous fiscal year, hitting a record $18.25 billion.
Trade deficit was $6.46 billion in the FY 2015-2016 and $9.47 billion in the FY 2016-2017.
In July of FY19, exports increased to $3.53 billion with 19.32 per cent growth compared with $2.96 billion in the same month of last fiscal year.
Of the total exports, readymade garment export increased by 21.74 per cent to $3.02 billion in July of FY19 compared with that of $2.48 billion in July of FY18.
On the other hand, import payments increased to $4.70 billion in July of the
current fiscal year against $4 billion in July of last fiscal year.
Country’s current account deficit, however, improved as the figure declined to $278 million in July this year from $478 million a year ago.
As per the BB data, current account deficit was $1.331 billion in FY17 and $9.78 billion in FY18.
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