Trade deficit widens 7.28% in July-May

The country’s trade deficit widened by $1.09 billion or 7.28% year-on-year to $16.06 billion in the first eleven months of the outgoing 2019-20 fiscal year as export earnings fell more than import spending.

The widening deficit also indicated a sluggish trend in the economy owing to the global coronavirus pandemic.

The deficit rose by $1.09 billion $16.06 billion from July to May, from $14.97 billion in the same period of the last fiscal year, according to the Bangladesh Bank (BB) latest data.

Export growth contracted by 18.16% to $30.17 billion in July-May from $36.86 billion in the same period of the previous fiscal year.

Import growth also dropped by 10.81% to $46.24 billion from $51.84 billion, as per the latest BB data.

The indication is not good for the economy as the volume of export and imports have been decreasing alarmingly in the last few months, says experts.

However, current account deficit decreased 15.13% year-on-year to $4.37 billion in the first eleven months of the current fiscal year, as per central bank data.

The trade deficit will increase alarmingly in the coming months owing to downward trend in both export and remittance, says Zahid Hussain, former lead economist of the World Bank, Bangladesh.

The decreasing trend of current account deficit will not sustain in the near future, he also adds.