The Bangladesh Journal - Bangladesh's Trade deficit soars by18pc

Trade deficit widened by 18 per cent as the country imported goods worth over $10 billion and exported only $7.97 billion worth of commodities in the July-February period of the current fiscal year, according to the Bangladesh Bank’s monthly update.

Total imports were worth $8.3 billion and total exports $6.6 billion in the same period in the last fiscal year.

Service imbalance also jumped up 35 per cent and income imbalance recorded 25 per cent growth in the 8-month period.

Total service receipts were worth $870 million and payments were $1,835 million, while total income receipts were worth $138 million and payment $722 million.

Settlement of letters of credit for consumer goods increased by 145 per cent to $844 million, intermediate goods by 220 per cent to $888 million, industrial raw materials by 419 per cent to $3,918, capital machinery by 176 per cent to $1,002 million, and petroleum products by 248 per cent to $1,355 million in the July-February period.

However, due to robust remittance inflow of $3.8 billion, the current account balance — $484 million — was positive.

The balance of payment figure — $577 million — was also positive in the period under review. The overall BoP was $360 million in the July-January period.

Foreign direct investment, which was $489 million in the same period of the last fiscal year, declined to $325 million. Portfolio investment, however, increased to $42 million in the July-February period from $16 million of the same period in the last fiscal year.

Domestic credit increased by 9.58 per cent or Tk 17,036 crore in the period. The private sector loans increased by 9.7 per cent or Tk 12,700 crore.

Broad money posted a growth of 10.38 per cent or Tk 18,805 crore in July-February period against the increase of Tk Tk 15,093 crore or 9.96 per cent in the same period of the last fiscal year.

Reserve money recorded an increase of Tk 5,854 crore in the period compared to the rise of Tk 4,875 crore in the same period of the last fiscal year.

The government borrowed Tk 4,906 crore from the banking sector up to February 2007, nearly triple of Tk 1,716 crore borrowed in the same period of the last fiscal year.

Total foreign aid disbursement in the July-February period of the current fiscal year was lower at $532 million; it was $850 million in the same period of the last fiscal year. The country paid $325 million in the period so that net foreign aid stood at $206 million; it was $546 million in the same period of the last fiscal year.