The country’s trade deficit declined to $790 million in the first two months of the current financial year from $885 million in the corresponding period of the FY13.
The deficit went down by 10.73 per cent in July-August of the FY14 compared with that of around 115.45 per cent increase in the same period of the FY13, according to the latest Bangladesh Bank data released on Monday.
A BB official told New Age that the reasons for the narrowed trade deficit were the rise in exports and the drop in imports.
He said that the narrowed trade gap would not put any positive impact on the country’s macro-economic situation if the imports of industrial raw materials, capital machinery and intermediary goods did not increase in accordance with the country’s industrial requirement.
The exports posted a robust growth in first two months of the FY14, but the growth of import payments failed to achieve an expected level in the period due to a stagnant situation in the investment sector in the country amid political unrest.
The BB data, however, showed that the settlement of letters of credit increased in the first two months due mainly to a rise in imports of food products as the businesspeople moved to build stocks of food grains due to a lower production of rice in the FY13.
Besides, they imported huge amount of commodity products in the period considering the political unrest ahead of the general elections.
The imports registered a 10.57 per cent growth in the first two months of the FY14 compared with that of around 4.49 per cent growth in the corresponding period of the FY13.
The import payment stood at $5.78 billion in July-August of the FY14 and it was $5.23 billion in the same period of the FY13.
The country’s export earnings increased by 14.91 per cent in the first two months of the FY14 compared with that of around 6.55 per cent negative growth in the same period of the FY13.
The export earnings stood at $4.99 billion in the first two months of the FY14 and it was $4.34 billion during the same months of the FY13.
Another BB official said an unfavourable business situation was now prevailing in the country due to the recent spates of political violence which had already put an adverse impact on the investment sector.
Besides, banks were compelled to take a cautious policy on opening fresh letters of credit due to the financial scams in different banks, he said.
Under the circumstances, the businesspeople felt discouraged in importing products from abroad, he said.
The BB data, however, showed that the service sector deficit increased by 12.44 per cent to $560 million in the first two months of the FY14.
In July-August of the FY14, the country received $456 million from the service sector but it paid foreign sources $1.01 billion during the same period of the FY13.
The current account balance declined by 1.89 per cent in the first two months of the FY14 from that in the same period of the FY13 due mainly to the lower inward remittance.
The current account balance decreased to $674 million in July-August of the FY14 from $687 million in the same months of the FY13.
The BB data showed that the inward remittance had registered a negative growth of 5.73 per cent in the first two months of the FY14 from that in the same period of the FY13.
The expatriate Bangladeshis sent $2.22 billion in July-August of the FY14 against $2.35 billion during the same period of the FY13.
Net foreign direct investment increased by 9.02 per cent to $290 million in the first two months of the FY14 from that of $266 million in the same period of the FY13.
In the first two months of the FY13, medium- and long-term loan also decreased by 23.21 per cent to $215 million from $280 million in the corresponding period of the FY13.
-With New Age input
