The country's trade deficit has widened by 1.50 per cent or US$145 million in the first seven months of the current fiscal year (FY) because of rising import payment pressure on the economy, officials said.
The overall trade deficit rose to $9.79 billion during the July-January period of FY 2020-21 from $9.64 billion during the same period of the previous fiscal, according to the central bank's latest statistics.
"Import expenses have increased significantly in the month of January due to higher imports for readymade garments along with resumption of infrastructure development works across the country," a senior official of the Bangladesh Bank (BB) told the FE on Tuesday.
Bangladesh paid $6.69 billion for making import payments only for the month of January 2021, the BB data showed.
Import payments stood at $31.92 billion in the first seven months but it was $25.23 billion in the six months of FY'21.
Higher import payment obligations indicate that the country's overall activities are bouncing back gradually from the ongoing Covid-19 pandemic, according to BB officials.
They also said the rising trend in the prices of essential commodities including fuel oils in the global market has pushed up import payment obligations.
On the other hand, export earnings dropped by 1.02 per cent to $22.13 billion in the first seven months of FY'21 from $22.36 billion a year ago.
"The growth of both export and import will pick up in the coming months because of the base year effect," the central banker predicted while replying to a query.
He also said foreign trade covering both export and import in amount termed for each month would remain almost stable.
Talking to the FE, Khondaker Golam Moazzem, research director of Centre for Policy Dialogue (CPD), said the country's overall trade deficit may widen further by the end of the current fiscal year.
"Import payments will be higher than that of export earnings," Dr. Moazzem said while explaining the trade pattern of Bangladesh.
Such import payments also pushed down the current account surplus significantly despite higher growth of inward remittances, according to the officials.
The current account surplus stood at $2.23 billion in the seven months of FY'21, which was a $1.81 billion deficit in the same period of the last fiscal year, the BB data showed. Such surplus was $4.10 billion a month ago.
"The falling trend in current account surplus may continue in the coming months if the existing trend in foreign trade persists," the BB official noted.
Meanwhile, the flow of inward remittances grew by nearly 35 per cent to $14.91 billion during the period under review from $11.05 billion during the same period of FY'20 despite the ongoing Covid-19 pandemic.
On the other hand, surplus in the financial account increased significantly during the July-January period of FY'21 due to higher inflow of medium and long-term loans.
The financial account's surplus rose by more than 90 per cent to $4.45 billion during the period under review from $2.34 billion in the same period of FY'20.
Talking to the FE, another BB official said higher inflow of medium and long-term loans has helped achieve higher growth of the financial account surplus despite the falling trend in net foreign direct investment (FDI).
As a result, overall balance of payments (BoP) rose to $6.41 billion in the first seven months of FY'21 from $132 million in the same period of the previous fiscal.
