Country’s trade deficit in July-August of the current financial year 2018-19 soared by 19.30 per cent compared with the same period of last FY due to continuous rise in import payments.
Trade deficit in the first two months of FY19 stood at $2.10 billion against $1.76 billion in the same period of FY18, according to Bangladesh Bank data released on Sunday.
Export earnings in July-August stood at $6.71 billion with 2 per cent year-on-year growth while import payments grew by 5.66 per cent to $8.82 billion.
BB officials said that export earnings in two months posted a meagre growth because of Eid holidays in August that affected shipment of readymade garment products but import payments continued to rise during the period.
They said that the trade deficit of growth around 19.30 per cent in two months was worrying on the back of around 240 per cent year-on-year growth of trade deficit in July-August of last FY18.
Experts and Bangladesh Bank officials blamed higher import payments for the continuous trade deficit and expressed their doubt that in the election year a section of business people might launder money in the name of imports.
Experts suggested BB for strict measures with a view to preventing capital flights in the name of imports ahead of national polls to be held by January next year.
They apprehended surge in inflation and pressure on the country’s economy as a whole due to the continuation of heavy trade deficit.
During July-August of FY19, the country’s current account balance, however, improved slightly, though still remained in deficit, compared with the same period of last year.
The current account deficit in two months declined to $60 million from $369 million in the same period of FY 18 due to rise in remittance inflow, foreign loans and foreign direct investment.
BB data also showed that the country’s net foreign direct investment increased by 7.46 per cent to $216 million during July-August this year against $201 million in the same period last year.
Overall balance posted a surplus of $156 million during the period which was a deficit amount of $206 million during the same period in FY 18.
Source: New Age.