Country’s trade deficit in the first quarter of the current financial year (2019-20) narrowed by 3.50 per cent or $135 million year-on-year but the indication of an economic slowdown remained as both the export growth and the import growth were negative in the period.
According to the Bangladesh Bank data released on Thursday, trade deficit dropped to $3.72 billion in the July-September period of FY20 against $3.85 billion in the same period of FY19.
In July-September this year, imports fell by 2.55 per cent to $13.25 billion from $13.60 billion in the same period last year.
BB officials said that although the trade deficit dropped in the first quarter of FY20, the negative growth in both the import and the export showed stagnancy of the economy.
They said that negative growth in import and export meant that investment was not taking place and machinery and raw materials were imported in a slow pace due to production of lower volume of export products.
Export earnings in the first quarter of FY20 dropped by 2.18 per cent to $9.53 billion from $9.74 billion in the same period of FY19.
Experts said that export earnings continued to drop as recent world economic woes affected global consumption of readymade garment products.
According to the government data, country’s export earnings in the July-October period of FY20 fell by 6.82 per cent while the earnings in October dropped by 17.19 per cent.
The earnings from the RMG export in the four months of FY20 fell by 6.67 per cent to $10.57 billion from $11.33 billion in the same period of FY19.
The data showed that RMG export fell by 11.46 per cent in August, 4.70 per cent in September and 19.79 per cent in October.
Fall in exports was one of the key reasons for declining imports as industry expansion remained standstill due to sluggish demand for products, experts said.
The current account balance dropped to $678 million in July-September of FY20 from $1.32 billion in the same period of FY19.
The country’s overall balance dropped to $204 million in July-September of FY20 against $158 million in the same period of last fiscal year.
The BB data also showed that the country attained $642 million in net foreign direct investment in July-September this fiscal year against $599 million in the same period last fiscal year.
The net portfolio investment, meant for the investment in the country’s capital market, increased to $35 million from $29 million.
The BB statement also showed that the country’s gross reserve stood at $31.83 billion in the first quarter of FY20 from $31.95 billion in the same period of last fiscal year.
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