Country’s trade deficit increased by 88.95 per cent to $2.39 billion in the first quarter of this financial year compared with that of $1.26 billion during the same period of the FY 2013-14 due to higher import growth against lower export growth. The deficit had posted a negative growth of 37.37 per cent in the July-September period of the FY14, according to the latest BB data released on Wednesday.
The trade deficit was $1.87 billion in the first quarter of the FY13.
A BB official said the country had narrowed trade gap in the last two financial years but the gap increased significantly in August and September of this financial year due to a massive drop in export earnings.
The BB data showed that the export earnings had registered a 0.94-per cent growth in the first three 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 $7.60 billion in July-September of the FY15 and it was $7.53 billion during the same months of the FY14.
The imports registered a 13.62-per cent growth in the first three months of the FY15 compared with that of 9.37-per cent growth in the corresponding period of the FY14.
The import payment stood at $10.00 billion in July-September of the FY15 and it was $8.80 billion in the same period of the FY14.
Former interim government adviser Mirza Azizul Islam told New Age on Wednesday that the country’s export earnings had recently declined significantly and the fall pushed up the trade deficit in the first three months of the FY15.
‘Garment factory owners have insisted that their export earnings will increase from North America and Europe ahead of Christmas festival which will be celebrated on December 25. But, they are yet to show any positive impact in this connection,’ he said.
He feared that the export earnings from the readymade garments would not increase much as they failed to get adequate response from the importers by October.
The import of capital machinery increased significantly in the period which played a role in pushing up the overall import, he said.
‘The country is still facing a dull business situation. So the import of capital machinery has raised suspicion,’ he said.
For the rise in the capital machinery import, the trade deficit will widen in the coming months, Mirza Aziz said.
The BB data showed that the current account balance registered a deficit of $357 million in the first quarter of the FY15 after the country had maintained a surplus current account in the last few financial years.
The current account balance was $666 million in the first quarter of FY14.
Mirza Aziz said that the increased trade deficit had mainly hit the current account balance.
The net foreign direct investment increased by 10.24 per cent to $366 million in the first three months of the FY15 from that of $332 million in the same period of the FY14.
In the first three months of the FY15, medium- and long-term foreign loan also increased by 41.47 per cent to $423 million from $299 million in the corresponding period of the FY14.
The financial account in the country’s balance of payments posted a surplus amount of $1.78 billion in the first quarter of the FY15 from a deficit amount of $810 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
