The country’s trade deficit declined to $6.32 billion in the first 11 months of the just concluded fiscal year from $8.64 billion recorded in the corresponding period of the FY 2011-12.
The deficit went down by 26.78 per cent in July-May of the FY 2012-13 compared with that of a 6.12-per cent growth in the same period of the FY 2011-12.BB officials and an economist told New Age on Thursday that the trade deficit maintained a declining trend in the last financial year due mainly to lower growth in import and higher growth in export earning.
The narrowed trade gap in the first 11 months in the last financial year would not put any positive impact on the macro-economic situation as the import of capital machinery and industrial raw materials plunged in the period, they said.
The BB data showed that import registered a negative growth of 0.39 per cent in July-May of the FY 2012-13 compared with that of a 7.04-per cent growth in the first 11 months of the FY 2011-12.
The import payment stood at $30.23 billion in the first 11 months of the FY 2012-13. It was $30.34 billion in July-May of the FY 2011-12.
The country’s export earning, however, increased by 10.12 per cent in the first 11 months of the FY 2012-13 compared with that of a 7.44-per cent growth in the corresponding period of the FY 2011-12.
The export earning stood at $23.90 billion in the first 11 months of the FY 2012-13. It was $21.70 billion in July-May of the FY 2011-12.
A 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.
‘So, the declining trend in trade deficit has failed to bring any effective result for the country’s macroeconomic situation,’ he said.
The import of food grains including rice and wheat also declined in the last fiscal year because of bumper production in the last few harvesting sessions, he said.
‘Due to the lower import bill payments, majority of the commercial banks are now enjoying available foreign currencies. As a result, the country’s foreign exchange market has plunged into a volatile situation with the value of US dollar falling significantly in the period,’ he said.
The BB purchased record amount of greenback worth $5.11 billion from the scheduled banks in the concluded fiscal year in a bid to stabilise the foreign exchange market, he said.
The foreign exchange reserve stood at $14.91 billion on Thursday.
The BB data, however, showed that the service sector deficit increased by 6.89 per cent to $2.89 billion in the first 11 months of the FY 2012-13.
In July-May of the FY 2012-13, the country received $2.53 billion from the service sector but it paid foreign sources $5.43 billion.
The narrowed trade deficit and an increased trend in inward remittance have strengthened the country’s current account balance in the first 11 months of the FY 2012-13, said another BB official.
According to the BB data, the current account balance stood at $2.56 billion in July-May in the fiscal year against a negative figure of $530 million in the same period of the FY 2011-12.
Dhaka University economics department chairman MA Taslim said the trade deficit had declined due to a higher export growth against a lower import payment.
‘The GDP growth of a country usually increases if import declines. But it is not positive for our country. Our 90 per cent import products are related with production,’ he said.
He feared that the country’s industrial output had already declined due to the lower import.
The robust current account balance also indicates that the macro-economy is now passing a stagnant period as the government could not use the foreign currencies in productive sector, he said.
Net foreign direct investment increased by 3.42 per cent to $1.15 billion in the July-May period of the last fiscal year from that of $1.11 billion in the same period of the FY 2011-12.
In the first 11 months of the FY 2012-13, medium- and long-term loan also increased by 36.95 per cent to $1.71 billion from $1.25 billion in the corresponding period of the FY 2011-12.
-With New Age input
