The country’s trade deficit eased by 12.46 per cent or $0.95 billion in July-November of the current 2018-2019 fiscal year compared with that in the same period of the last fiscal year due mainly to a rise in export earnings.
In July-November of 2018-2019, trade deficit stood at $6.66 billion, down from $7.61 billion in the same period of previous fiscal, showed Bangladesh Bank data released on Sunday.
It’s the export earnings, especially in the readymade garment sector, which posted significant growth in the period thus narrowing down trade deficit of the country.
Bangladesh received higher orders for readymade garment products from western buyers who shifted their orders to Bangladesh amid the ongoing trade war between the USA and China.
Former interim government adviser AB Mirza Azizul Islam told New Age, ’Though the situation has improved a bit, there is no scope of being complacent.’
’Instead, we should focus on improving export basket along with efforts in collecting more remittance,’ he said.
Besides, the former interim government adviser also warns that the negative growth in capital mercenaries is not a good sign rather it indicates slowing investment.
To improve the investment situation, he suggested coordinated improvement regarding the infrastructure, energy, governance along with other ease of doing business indicators.
In July-November of FY19, the country’s export earnings grew by 16.75 per cent to $16.77 billion from $14.37 billion in the first five months of FY18.
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RMG export grew by 18.59 per cent to $14.18 billion in first five months against $11.96 billion in the first five months of the last fiscal year.
Import payments grew by 6.64 per cent year-on year to $23.43 billion in the period from $21.97 billion in the same period last fiscal year.
Experts, however, said that trade deficit was still at higher zone for the country.
Trade deficit declined slightly from the record higher base of last year, they said.
Deficit in the overall balance, however, doubled to $837 million in July-November of FY19 from that of $479 million in the same period of FY18.
In the period, the situation of current account balance also improved as the deficit dropped to $2.56 billion from $4.74 billion in the same period of last fiscal year due to rise in remittance inflows.
BB data showed that inflow of remittance increased by 14.83 per cent or $2.01 billion, taking the total remittance inflow to $15.53 billion in 2018 from $13.53 billion in the previous year.
In July-November of FY19, the country’s net foreign direct investment, however, declined to $620 million from $649 million in the same period of the last fiscal year.