Trade deficit rises by 23pc in Jul-Nov

Staff Correspondent | Published: 22:29, Jan 04,2017

 
 

The country’s trade deficit increased by 22.86 per cent to $3.88 billion in the first five months of the current financial year 2016-17 compared with that of $3.15 billion in the corresponding period of the 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 6.15-per cent growth in the July-November period of the FY17 from that in the same period a fiscal year ago.
The export earnings stood at $13.34 billion in the first five months of the FY17 while the earnings were $12.57 billion in the same period of the previous fiscal year.
The imports registered a growth of 9.50 per cent in the July-November period from that in the same period of the FY16.
The import payment stood at $17.22 billion in the first five months of the FY17 while it was $15.73 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 five months of the FY17 as the import payments swelled in the recent period.
He said that the import payments mainly increased in the recent months of this fiscal year as the central bank earlier asked the banks not to keep LCs unsettled for long.
Observing that a number of banks are not settling LCs in due time, the BB has recently issued a letter to managing directors and chief executive officers of all banks asking them to settle the pending LCs in the shortest possible time.
For this reason, the banks heavily settled their pending LCs in the first five months of this fiscal year that eventually increased the overall import payments during the period.
The BB data showed that the import of capital machinery and industrial raw materials increased to Tk 2.09 billion and Tk 5.32 billion respectively in the first five months of the FY17 from Tk 1.14 billion and Tk 4.92 billion during the same period of the FY16.
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 $726 million in the first five months of the FY17 from a surplus amount of $1.33 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 15.67 per cent in the July-November period of the FY17 from that in the same period a financial year ago.
The inflow of inward remittance decreased to $5.12 billion in the first five months of the FY17 from $6.07 billion during the corresponding period of the FY16.
The net foreign direct investment increased by 9.60 per cent to $719 million in the July-November period from that of $656 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 $2.90 billion in the first five months of the FY17 from $1.18 billion 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 6.89 per cent to $1.90 billion in the July-November period against $2.04 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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