03Bangladesh Bank has projected that the country’s trade deficit might widen to $13.41 billion in the financial year 2015-16 while current account balance might register a deficit amount of $3.55 billion. The BB projects that the trade deficit — gap between export earnings and import payments — will also cross $10-billion mark for the first time in the just-concluded FY15 after hitting an all-time high of $9.46 billion in the first 11 months. The BB thinks that deficit in current account might decline to $1.63 billion in the FY15 due to rise in import growth against a lower export earnings. The central bank’s estimation came from its monetary policy statement for the FY16, unveiled on Thursday, projecting that the upward trend in the foreign exchange reserve would also maintain a slower pace during the period due to the pick-up of the investment. The latest MPS claimed that the huge amount of shortfall in the current account balance would not created any worried situation in the macro economy as the amount of deficit is around two per cent of the country’s GDP volume. So, it will not create any major concern for the economic stability, it said. The BB estimated that the import payment would register a 14-per cent growth, 7.5-per cent growth in exports, and 10-per cent growth in remittances for the FY16. The central bank projected that the export earnings would stand at $33.06 billion and import payments at $46.48 billion in the FY16 against an estimation of $30.76 billion and $40.77 billion respectively in the FY15. The trade deficit stood at $9.46 billion in the first 11 months of the FY15 and deficit in current account is $2 billion during the period. Former finance adviser to the interim government AB Mirza Azizul Islam earlier told New Age that falling export growth of readymade garments, the main export product of the country, dented the overall earnings in July-May of the FY15. He said that the country’s export sector lacked diversification in both products and foreign markets. Aziz feared that the export earnings might continue the sluggish trend in months to come as the current fiscal year’s budget had not taken an initiative to diversify the products and markets. The country maintained a higher import growth in the first 11 months of the FY15 which 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, the economist said. He said, ‘The import growth was much higher in the first 11 months of FY15 considering its little impact on the country’s industrial sector as the businesspeople had not taken significant initiative to expand their business during the period due to political crisis.’ Aziz feared that some of the importers might be involved in money laundering through over-invoicing. A BB official told New Age on Friday that the country should take initiative to increase the export earnings; otherwise the huge projected trade gap would create volatility in the macro-economic situation. Besides, the BB should increase its monitoring on the banking sector containing the money laundering and other financial scams, he said. Money laundering in the banking sector through the over-invoicing and under-invoicing will apparently show a robust impost growth resulting that it (import growth) will put an adverse impact on the financial sector, the central banker said.
