The country’s trade deficit decreased to $5.27 billion in the first 10 months of the current financial year 2015-16 compared with that of $5.87 billion in the same period of FY15 amid a fall in import payments against higher export earnings. The country had registered a trade gap of $5.50 billion in the first 10 months of FY14, according to Bangladesh Bank data. A BB official said the country posted a record trade gap in last financial year but the deficit decreased in the July-April period of FY16 due to a drop in import payments. The trade deficit had hit its all-time high at $9.91 billion in FY15. The BB data showed that the export earnings registered 8.35 per cent growth in the first 10 months of FY16 compared with the 2.42-per cent growth in the same period of FY15. The export earnings stood at $26.98 billion in the July-April period of FY16 and it was $24.90 billion during the same period of FY15. The imports registered 4.81 per cent growth in the first 10 months of FY16 compared with the 3.21-per cent growth in the corresponding period of FY15. The import payments stood at $32.25 billion in the July-April period of FY16, which were $30.78 billion in the same period of FY15. A BB official told New Age on Wednesday that the country’s businesspeople were not interested much in opening letters of credit to expand their business due to the ongoing dull business situation and vulnerable law and order situation in the country. So, the trade gap decreased in recent months, but it would not put much positive impact on the country’s macroeconomic situation as the import of industrial raw materials did not increase much to match the size of the country’s industrial sector, he said. Dull business amid political uncertainty and vulnerable law and order situation put an adverse impact on the country’s imports, which contributed to squeezing of the trade gap, the official said. The investors and businesspeople are yet to regain their confidence to go for business expansion, and so the import financing by banks has remained dull in recent months, he said. The businessmen are still following a cautious policy in setting up new industrial units and expanding existing industrial infrastructure, as they think political unrest may return anytime due to an absence of proper law and order, the BB official said. The BB data showed that the current account balance increased to $3.13 billion in the first 10 months of FY16 against $2.20 billion during the same period one year ago. The contracted trade deficit mainly played a role in registering a surplus current account balance in the first 10 months of FY16. The net foreign direct investment increased by 20.93 per cent to $1.82 billion in the July-April period of FY16 from that of $1.50 billion in the same period of FY15. The financial account of the country’s balance of payments decreased to $1.06 billion in the first 10 months of FY16 from $1.36 billion during the same period of FY15. The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans. The country’s overall balance increased by 20.82 per cent to $3.97 billion in the July-April period of FY16 against $3.29 billion during the same period of FY15 due to a strong position in the current account balance.
