The country’s trade deficit decreased by 37.55 per cent to $1.51 billion in the first quarter of this financial year compared with that of $2.42 billion during the same period of the FY 2014-15 due to higher export growth against negative import growth. The deficit had surged by 88.95 per cent in the July-September period of the FY15, according to the latest BB data released on Thursday. A BB official said the country had posted a record trade gap in the last financial year but the gap decreased significantly in the first quarter of the FY16 due to a massive drop in import payments. The trade deficit had hit its all-time high at $9.91 billion in the FY15. The BB data showed that the export earnings registered a 0.75-per cent growth in the first three months of the FY16 compared with that of 0.94-per cent growth in the same period of the FY15. The export earnings stood at $7.64 billion in the July-September period of the FY16 and it was $7.58 billion during the same period of the FY15. The imports registered an 8.53-per cent negative growth in the first three months of the FY16 compared with that of 13.62-per cent growth in the corresponding period of the FY15. The import payment stood at $9.15 billion in the July-September period of the FY16 and it was $10.00 billion in the same period of the FY15. A BB official told New Age on Thursday that the country’s businesspeople were now reluctant to open letters of credit to expand their business due to the ongoing political uncertainty. He said that the narrowed trade gap would not put much positive impact on the country’s macroeconomic situation as the gap had not narrowed due to a better export growth. Political uncertainty in the recent period put an adverse impact on the country’s import and it contributed to narrowing of the trade gap, he said. The investors and business community are yet to regain their confidence to expand their business resulting that the import financing by the banks remains dull in recent months, he said. The businessmen are still following a cautious policy in importing industrial raw materials as they think that the political unrest will return anytime soon, he said. ‘A lower trade deficit brings positive impact to a country’s economy if it (country) achieves the narrowed gap by registering a higher export growth. But, the trade deficit declined in Bangladesh mainly due to lower import of industrial raw materials,’ he said. The BB data showed that the current account balance increased to $739 million in the first three month of the FY16 against a deficit amount of $293 million during the same period a financial year ago. The decreased trade deficit mainly played a role in registering a surplus current account balance in the first quarter of the FY16. The net foreign direct investment increased by 35.65 per cent to $449 million in the July-September period from that of $331 million in the same period of the FY15. The BB data, however, showed that the financial account of the country’s balance of payments decreased to $798 million in the first three month of the FY16 from $1.53 billion during the same period of the FY15. The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans. The country’s overall balance increased by 67.45 per cent to $1.97 billion in the July-September period of the FY16 against $1.17 billion during the same period of the FY15 due to its strong position in the current account balance, the BB data showed.
