The country posted a trade deficit of $990 million in the first two months of the current financial year 2014-15 despite having trade surplus in July as export earnings in August nosedived compared to the import earnings in the month. The trade deficit in July-August of FY 14 was $790 million. The country posted a trade surplus of $185 million in July, for the first time in the last 14-15 years, but the trade gap again entered the negative zone due to higher import payment in August, a BB official told New Age on Tuesday.
Trade gap in August was a massive $1.18 billion dollar because of a lower export earning figure of $2.13 billion against the import payment of $3.31 billion.
Former BB governor Salehuddin Ahmed told New Age that the country’s export earnings had recently declined due to a slower growth in European and North American market that pushed up the trade deficit in the first two months of the FY15.
The BB data showed that the country’s export earnings had registered 1.94-per cent growth in the first two months of the FY15 compared with that of 14.91-per cent growth in the same period of the FY14.
The export earnings stood at $5.09 billion in the first two months of the FY15 and it was $4.99 billion during the same months of the FY14.
Salehuddin said the country’s export sector was badly hit in the North America and European zones as the global economic recovery from recession did not improve in accordance with expectation.
For this reason, the consumer demand in the North America and European zones did not increase, hitting the export of Bangladesh, he said.
Besides, the US has started to shift its regular readymade garments import from Bangladesh to other countries after the collapse of Rana Plaza, which housed several garment factories, the BB official said.
Moreover, the local currency taka is relatively stronger than the US currency which discourages the businesspeople to speed up their export, he said.
The government should take initiative to speed up the export earnings, otherwise, the trade deficit will widen more in the coming months, the official said.
The import payments in the first two months increased significantly than that of export earnings, but it was not expected in accordance with the country’s business volume.
The imports registered a 5.29-per cent growth in the first two months of the FY15 compared with that of 10.57-per cent growth in the corresponding period of the FY14.
The import payment stood at $6.08 billion in July-August of the FY15 and it was $5.78 billion in the same period of the FY14.
The current account balance declined by 50.15 per cent in the first two months of the FY15 from that in the same period of the FY14 due mainly to the lower export earnings, the BB data showed.
The current account balance decreased to $327 million in July-August of the FY15 from $656 million in the same months of the FY14.
Net foreign direct investment increased by 10.41 per cent to $244 million in the first two months of the FY15 from that of $221 million in the same period of the FY14.
In the first two months of the FY15, medium- and long-term foreign loan also increased by 50.93 per cent to $326 million from $216 million in the corresponding period of the FY15.
The financial account in the country’s balance of payments posted a surplus amount of $624 million in the first two months of the FY15 from a deficit amount of $556 million during the same period of the FY14.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
-With New Age input
