Trade deficit more than trebles


The trade deficit widened more than three times to $ 1.81 billion in the first two months of the fiscal year due to a surge in imports and exports, A drop in exports

"Import growth has been too high up until now this fiscal year," said Ahsan H Mansur, executive director of the Policy Research Institute, a private think tank.

During the July-August period of the fiscal year, imports rose by about 34 percent to $ 8.35 billion, according to data from the Bank of Bangladesh.

"This is not sustainable because it abnormally pushed private sector credit growth."

On the other hand, export earnings have not increased in line with import bills during the period, Mansur said.

Exports jumped 13.92% to $ 6.63 billion over the period, according to data from the Export Promotion Bureau.

The current account balance recorded a deficit of $ 451 million in the first two months of the year, compared to a surplus of $ 812 million a year earlier.

Figures of transfers and negative balances are to blame

Discounts are a major source of foreign exchange for Bangladesh and its downturn since fiscal year 2015-16 has gradually become a source of concern for the government.

But in recent times, the government and the central bank have taken various measures that have contributed to an influx of inflows.

Payments rose 15.81 percent to $ 2.53 in the first two months of fiscal year 2017-18, according to central bank statistics

The country will have to manage its current account deficit by depleting its foreign exchange reserves, which would not bring anything back to the economy, said AB Mirza Azizul Islam, advisor to a former interim government.

Taka will depreciate more against the US dollar if the current account continues to maintain the large deficit.

"Such a depreciation trend will help exporters slightly but will fuel inflation," Islam said.

Subsequently, at the end of August, the overall balance was negative at $ 206 million, compared with $ 1.17 billion in the previous year

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