The country’s trade deficit in the first five months of the current financial year 2014-15 soared to $4.48 billion, equalling the previous record registered in July-November of the FY12 due to a massive drop in export earnings against higher import payment.
According to Bangladesh Bank data released on Tuesday, the trade deficit increased by 99.15 per cent in the first five months of the FY15 compared with that of $2.25 billion during the corresponding period of the FY14.
The trade deficit stood at $3.49 billion in the first five months of the FY13 and $4.48 billion in the FY12 which was all-time high considering the first five months of a financial year.
The BB data showed that the trade deficit had registered a record amount of $9.32 billion in the FY12.
The export earnings had registered a 0.91-per cent growth in the first five months of the FY15 compared with that of 18.39-per cent growth in the same period of the FY14.
The export earnings stood at $11.92 billion in July-November of the FY15 and it was $11.81 billion during the same months of the FY14.
The imports registered a 16.62 per cent growth in the first five months of the FY15 compared with that of 4.36 per cent growth in the corresponding period of the FY14.
The import payment stood at $16.40 billion in July-November of the FY15 and it was $14.06 billion in the same period of the FY14.
Centre for Policy Dialogue executive director Mustafizur Rahman told New Age on Tuesday that the lower growth in export earnings had put an adverse impact on the country’s trade account.
‘The lower export growth in recent period has already created a worrisome situation for the country’s business sector. The higher import growth, however, put a positive impact on the macro-economic condition’, he said.
But, import of some items of capital machinery was increased significantly in the last few months which rose suspicious that money laundering might have occurred behind such activities, Mustafiz said.
He explained that industrial term loan had not increased much in the period meaning that the industrial units had not expanded in line with the import of robust amount of the capital machinery.
The BB and National Board of Revenue should take initiative to start investigation to detect the over-invoicing through the import process, said the economist.
Mustafiz said, ‘The higher traded deficit will not bring any adverse impact on the macro-economic situation if the exports pick up and the imported capital machinery are utilised accurately’.
Former interim government’s finance adviser AB Mirza Azizul Islam told New Age that higher import growth in the five months was apparently good for the industrial sector, but the upward trend had also raised suspicion due to a lower private sector credit growth in the recent months.
He feared that the importers might now be making over-invoicing to launder money abroad as the recent higher import growth had not put major positive impact on the industrial sector.
The BB data showed that the current account balance had registered a deficit amount of $1.31 billion in the first five months of the FY15 against a surplus amount of $1.12 billion during the same period a financial ago.
Aziz said the inward remittance continued to maintain an increased trend in the last few months which could have played a role in strengthening the current account balance.
But, the large trade gap widened the current account balance in the first five months, he said.
Net foreign direct investment increased by 5.79 per cent to $585 million in the first five months of the FY15 from that of $553 million in the same period of the FY14, the BB data showed.
The country’s overall balance decreased by 43.28 per cent to $1.15 billion in the first five months of the FY15 against $2.04 billion during the same period of the FY14 due to its week position in the current account balance.
-With New Age input
