The country’s trade deficit is set to cross the record of $9.32 billion in the outgoing financial year 2014-15 as the gap already stood $8.49 billion in the first 10 months due to a drop in export growth against higher import. According to Bangladesh Bank data, the country registered a record gap in import payments and exports earning of $9.32 billion in the FY12 after which the deficit decreased to $7 billion and $6.80 billion respectively in the FY13 and the FY14. ‘The trade gap in the first nine months [July-March] was $7.14 billion which soared to $8.49 million July-April. With the current trend, the trade deficit will easily cross the record set in the FY12 at the end of the current fiscal year,’ said a BB official, while talking to New Age. The trade deficit in July-April of the current fiscal year is 54.18 per cent higher than that of $5.5 billion in the corresponding period of the FY14. Officials of Bangladesh Bank said falling export growth of readymade garment, the main export product of the country, dented the overall earnings in July-April of the FY15 while import registered an increased trend during the period. The export earnings registered a 2.67-per cent growth in the first 10 months of the FY15 against 13.57 per cent growth in the same period of FY14. The export earnings stood at $24.96 billion in July-April of the FY15 while it was $24.31 billion during the same period of the FY14. The BB data showed that RMG exports from Bangladesh in the July-April period of the FY15 rose by 3.18 per cent compared with that of 15.39 per cent during the same period a financial year ago. The country’s export earnings from the RMG sector stood at $20.56 billion in the first 10 months of the FY15 against the last year export value of $19.97 billion. The overall imports registered a 12.19-per cent growth in the first 10 months of the FY15 compared with that of 10.54 per cent growth in the corresponding period of the FY14. The import payment stood at $33.46 billion in July-April of the FY15 and it was $29.82 billion in the same period of the FY14. The BB official said that the decreased growth in export earnings had put an adverse impact on the country’s trade account. The lower export growth in the recent period has already created a worrisome situation for the country’s business sector, he said. The higher import growth in the period was apparently good for the industrial sector, but the trend also raised suspicion of money laundering due to a lower private sector credit growth in recent months, he said. He said, ‘The import growth of capital machinery was much higher than that of industrial raw materials, but the businesspeople took little initiative to expand their business in the period due to political crisis.’ He said importers might now be making over-invoicing to launder money abroad as the recent higher import growth had not put any major positive impact on the industrial sector. The BB data showed that the current account balance registered a deficit amount of $1.64 billion in the first 10 months of the FY15 against a surplus amount of $1.53 billion during the same period a year ago. The net foreign direct investment increased by 5.02 per cent to $1.25 billion in the first 10 months of the FY15 from that of $1.19 billion in the same period of the FY14. The BB data, however, showed that the financial account of the country’s balance of payments decreased to $601 million in the first 10 month of the FY15 from $719 million during the same period of the FY14. The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans. The country’s overall balance decreased by 23.52 per cent to $3.29 billion in the first 10 months of the FY15 against $4.30 billion during the same period of the FY14 due to its weak position in the current account balance.
