Bangladesh’s trade deficit widens to $7.6 billion in 5 months
Bangladesh’s trade deficit in the first five months of the current fiscal year stands at $7.6 billion, as import spending continues to rise.
Bangladesh spent $21.97 billion on imports from July to November in fiscal 2017-18, according to a central bank report released on Sunday. It fetched about $14.37 billion in exports in the same period.
The trade deficit thus stands at $7.6 billion, a 96.1 percent increase year-on-year.
Between July and November in fiscal 2016-17, Bangladesh’s trade deficit stood at $3.88 billion. The total deficit at the end of fiscal year 2016-17 was $9.47 billion.
The highest trade deficit in Bangladesh’s history is $9.94 billion in fiscal 2010-2011. In FY 2011-12 the deficit was $9.32 billion. The deficit in the first five months of 2017-18 exceeds the total deficit in all but these three fiscal years.
According to the report, import spending rose 27.57 percent in these five months, while export earnings increased 7.65 percent.
A significant amount of the imports are materials for major infrastructure projects such as the Padma Bridge and the Metro Rail, former Bangladesh Bank Governor Mohammed Farashuddin told.
Another cause is the rising price of oil on the world market. Bangladesh is also importing a significant amount of rice to compensate for the crop losses in last year’s floods.
The deficit has gone up because export earnings were unable to keep up with the total impact of these factors, said Farashuddin.
According to the central bank, spending on food import (rice and wheat) rose 257 percent in the July to November period. Spending on infrastructure construction machinery also rose about 40 percent. Spending on oil rose 35 percent and spending on construction materials rose 18 percent.