Economists say falling imports no positive sign for economy
The country’s trade deficit declined to $7.01 billion in the recently concluded financial year 2012-2013 from $9.32 billion recorded in the FY 2011-12.
Economists and Bangladesh Bank officials told New Age on Sunday that the narrowed trade gap would not put any positive impact on the country’s macro-economic situation as import of industrial raw materials, capital machinery and intermediary goods declined significantly in the FY13.
According to the BB data to be released today, the trade deficit went down by 24.78 per cent in the FY13 compared with that of a 20.35-per cent growth in the FY12.
Besides, the trade deficit was lowest in the last three years, as the deficit was $7.74 billion in the FY11.
A BB official said that the export sector had posted a robust growth in the FY13, but the import products for the productive sector had declined worriedly in the period due to a stagnant situation in the investment sector amid political unrest.
He said that businesspeople were now reluctant to expand their investment due to the recent spates of political violence which ultimately posted a narrowed trade deficit in the concluded financial year.
The BB data showed that imports registered a 0.80 per cent growth in the FY13 compared with that of a 9.80 per cent growth in the FY12.
The import payment stood at $33.57 billion in the FY13. It was $33.30 billion in the FY12 and $30.33 billion in the FY11.
The country’s export earnings, however, increased by 10.74 per cent in the FY13 compared with that of a 6.18 per cent growth in the FY12.
The export earnings stood at $26.56 billion in the FY13. It was $23.98 billion in the FY12 and $22.56 billion in the FY11.
Former interim government adviser AB Mirza Azizul Islam told New Age that the narrowed trade deficit was apparently good for the macro-economic situation, but the indicator of the last financial year will not bring any satisfactory condition for the country.
He explained that the import of the country had a negative growth in most of the time last financial year due mainly to lower import payments for capital machinery, intermediary goods and industrial raw materials.
The GDP growth of the country declined to 6.03 per cent in the FY13, much below the government’s target of 7.2 per cent, because of the lower import growth for the industrial raw materials and capital machinery.
Former BB governor Salehuddin Ahmed said the trade deficit had declined in the FY13 due to a lower investment trend in the private sector.
He said the credit growth in the private sector had decreased significantly in the last few months as the businesspeople had adopted a ‘wait and see’ approach due to the existing political unrest.
The BB data showed that the credit growth in the private sector had declined to 11.43 per cent in the first 11 months of the FY13 compared with that of 18.40 per cent in the corresponding period of the FY12.
The employment generation is now maintaining a declining trend due to lower credit growth in the private sector, Salehuddin said.
Under the circumstances, the lower trade gap in the FY13 will not create any good news for the macro-economic situation of the country, he said.
The BB data, however, showed that the service sector deficit increased by 5.25 per cent to $3.15 billion in the FY13.
In the FY13, the country received $2.83 billion from the service sector but it paid foreign sources $5.98 billion.
Net foreign direct investment increased by 9.15 per cent to $1.30 billion in the last financial year from that of $1.19 billion in the same period of the FY12.
In the FY13, medium- and long-term loans also increased by 38.66 per cent to $2.13 billion from $1.53 billion in the FY12.
-With New Age input
