Trade gap jumps to $7.14b in 9 months, Export growth remains sluggish against higher import in July-March

The country’s trade deficit increased by 56.78 per cent to $7.14 billion in the first nine months of the current financial year 2014-15 compared with that of $4.55 billion during the same period of the FY14 due to a massive drop in export earnings against a higher import payment.Officials of Bangladesh Bank said falling export growth of readymade garment, the main export product of the country, dented the overall earnings in July-March of the FY15 while import of capital machinery continued to rise significantly during the period.The trade deficit had posted a growth of 4.94 per cent in July-March of the FY14, according to the BB data.The trade deficit was $4.86 billion in the first nine months of FY13.The export earnings registered a 2.96-per cent growth in the first nine months of the FY15 against 13.46 per cent growth in the same period of FY14.The export earnings stood at $22.61 billion in July-March of the FY15 while it was $21.96 billion during the same period of the FY14.The BB data showed that RMG exports from Bangladesh in the July-March period of the FY15 rose by 3.18 per cent to $18.62 billion against the last year export value of $18.05 billion, but the figure was 4.72 per cent less than that of the target of $19.55 billion set for the first nine months.

The imports registered a 12.21-per cent growth in the first nine months of the FY15 compared with that of 11.09 per cent growth in the corresponding period of the FY14.The import payment stood at $29.76 billion in July-March of the FY15 and it was $26.52 billion in the same period of the FY14.A BB official told New Age on Monday that the decreased growth in export earnings had put an adverse impact on the country’s trade account.The lower export growth in the recent period has already created a worrisome situation for the country’s business sector, he said.The higher import growth in the period was apparently good for the industrial sector, but the trend also raised suspicion of money laundering due to a lower private sector credit growth in recent months, he said.He said, ‘The import growth of capital machinery was much higher than that of industrial raw materials, but the businesspeople took little initiative to expand their business in the period due to political crisis.’He said importers might now be making over-invoicing to launder money abroad as the recent higher import growth had not put any major positive impact on the industrial sector.He said that the country’s commodity import would increase in the next few months ahead of Ramadan that would widen the trade gap more in the period.The BB data showed that the trade deficit in the service sector increased by 24.04 per cent to $3.58 billion in July-March of the FY15 from $2.89 billion in the corresponding period of the FY14.In the first nine months of the FY15, the country received $2.24 billion from the service sector but it paid foreign sources $5.83 billion for different services during the same period.

- See more at: http://newagebd.net/119005/trade-gap-jumps-to-7-14b-in-9-months/#sthash.u7Pl0z11.dpuf