Imports drop 5.26%, exports 7.51%
Trade deficit widened slightly in the first five months of the current fiscal year as export fell more than import, suggesting a sluggish trend in the economy.
The overall trade gap widened by $28 million or 0.42% year-on year to $6.68 billion during the period under review from $6.65 billion in the same period of FY19, according to the central bank latest data.
The country’s export growth fell by 7.51% to $15.52 billion in July-November from $16.78 billion in the same period of the previous fiscal. Import growth also dropped by 5.26% to $22.20 billion from $23.43 billion.
Current account deficit, however, decreased 54.76% year-on-year to $1.09 billion in the first five months of 2019-20 fiscal year, according to data.
“The increasing trend of remittance has helped reduce the deficit in the current account balance. The trend would not sustain in the future,” said Zahid Hussain, former lead economist of World Bank, Bangladesh.
The country’s remittance inflow increased by 25.33% to $9.40 billion in the first half of the current fiscal year compared to the same period of last fiscal year, according to Bangladesh Bank.
Trade deficit widened slightly due to the declining trend in export more than the import that indicated a weak economy, he added.
Zahid Hussain suggested that the government focus more on export diversification and devaluated the Taka against the US dollar for export growth.
“It is a very bad signal for our economy as all types of import including industrial capital machinery are declining,” he added.
“The overall import, particularly those of capital machineries and raw materials are the fundamental basis for local industrialization, which subsequently transforms into enhanced export earnings for the economy,” said Zahid Hussain.