Staff Correspondent | Jun 02,2020 New Age
Bangladesh’s trade deficit inched down to $12.07 billion year-on-year in July-March of the fiscal year 2019-2020 due to a slowdown in import of industrial inputs and capital machinery as the outbreak of coronavirus prompted the country’s major export destinations to impose prolonged shutdowns.
The overall trade gap narrowed by $123 million, or 1.01 per cent, in July-March period of FY20 from $12.20 billion in the same period of the last fiscal year, according to the latest Bangladesh Bank data.
Export dropped by 6.34 per cent, or $1.91 billion, to $28.25 billion in July-March this fiscal year from $30.16 billion in the same period of the previous fiscal year.
Import growth also dropped by 4.81 per cent, or $2.03 billion, to $40.33 billion from $42.36 billion.
The volume of import fall was higher than the volume of export fall, resulting in a trade deficit drop.
Current account deficit, however, decreased by 37.13 per cent to $2.64 billion in the first nine months of the current fiscal year from $4.21 billion in the same period of FY19.
Experts said that the trade deficit narrowed but it did not indicate anything good to the economy as the volume of export had been decreasing alarmingly for the last few months.
In April this year, the country’s export dropped by 82.85 per cent to $0.52 billion from $3.03 billion in the same month last year.
Experts said that the deficit might spike in April and May due to the steep fall in export earnings as the economic shock was immense in all the country’s export destinations.
The inflow of remittance declined by 14.01 per cent year-on-year to $1.50 billion in May as the global coronavirus pandemic took a toll.
The inflow of remittance would further decline in the coming days as a huge number of migrants would lose jobs due to the pandemic fallout.
The country’s overall balance stood at a surplus of $345 million in the first nine months of the current fiscal year, against a deficit of $326 million in the same period of the previous fiscal year.
The surplus overall balance would not sustain if the trade deficit and current account deficit widen.
In July-March of FY20, the net foreign direct investments dropped by 18.07 per cent to $1.8 billion from $2.2 billion in the same period of FY19.
As of March 31, the country’s foreign exchange reserve stood at $32.38 billion, the BB data showed.
