The country’s trade deficit narrowed by 22.57 per cent in the first eight months of the current financial year 2013-14 compared with that of the same period of the FY13 due to a rise in exports against a poor growth in imports. According to Bangladesh Bank data to be released today, the deficit decreased to $3.56 billion in July-February of the FY14 from $4.59 billion in the same period of the FY13.
The trade deficit, however, increased by $774 million in February from the total figure of $2.78 in July-January this year as the import of food grains and other commodity products posted a higher growth in the month.
A BB official told New Age on Tuesday that the country had been registering a narrowed trade gap in the recent months, but it would not put much positive impact on the macro-economic situation as the imports of industrial raw material and capital machinery did not increase in accordance with the industrial sector’s requirement.
He said that the businesspeople had continued with a ‘wait and see’ approach to make fresh investment amid political unrest centring the January 5 general elections.
The political uncertainty ultimately hit the import situation and narrowed the trade gap in the recent months of the FY14, he said.
He, however, predicted that the trade deficit would increase in the next few months as the import of commodity products would rise significantly ahead of Ramadan, the fasting month of Muslims.
The imports registered a 6.24-per cent growth in the first eight months of the FY14 compared with that of a negative growth of 1.45 per cent in the corresponding period of the FY13.
The import payment stood at $23.14 billion in July-February of the FY14 whereas it was $21.78 billion in the same period of the FY13.
The country’s export earnings increased by 13.95 per cent in the first eight months of the FY14 compared with that of 8.63 per cent growth in the same period of the FY13.
The export earnings stood at $19.58 billion in the first eight months of the FY14 while it was $17.18 billion during the same period of the FY13.
The businesspeople are yet to get confidence back to expand their businesses due to the ongoing political uncertainty, so the country failed to get its desired output from the narrowed trade gap in the recent month, another BB official said.
The BB data showed that the trade deficit in the service sector, however, increased by 24.41 per cent to $2.67 billion in July-February of the FY14 from $2.15 billion in the corresponding period of the FY13.
In the first eight months of the FY14, the country received $2.18 billion from the service sector but it paid foreign sources $4.86 billion for
different services during the same period of the FY13.
Transportation, travel, communication services, insurance and financial services, information and communications technology services, entertainment, culture and their related services are considered as the service sector.
The current account balance increased by 1.25 per cent in the first eight months of the FY14 from that in the same period of the FY13 due mainly to the robust export growth against the lower import cost.
The current account balance increased to $2.02 billion in July-February of the FY14 from $1.99 billion in the same period of the FY13.
The net foreign direct investment increased by 3.70 per cent to $1.14 billion in the first eight months of the FY14 from that of $1.10 billion in the same period of the FY13.
The BB data, however, showed that the financial account of the country’s balance of payments declined to $585 million in the first eight months of the FY14 from $2.28 billion during the same period of the FY13.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
Against the backdrop, the country’s overall balance decreased by 5.04 per cent to $3.32 billion in the first eight months of the FY14 against $3.50 billion during the same period of the FY13.
-With New Age input
