Bangladesh’s trade deficit has hit a record $13 billion in the first nine months of this fiscal year as the country’s imports stand at are nearly twice than the exports.
In the July to March period of 2017-18, During the July-March period, imports stood at $40 billion while exports earnings at a little over $27 billion.
According to Bangladesh Bank data, exports saw a negative growth of 1.38 percent in March compared to the same month last year.
Meanwhile, imports in February were higher by 33.45 percent compared to the same period last year.
Analysts say the soaring import cost will create a pressure on the economy.
“The banks have opened over 60 percent LCs (letter of credit), so the imports will rise in future, which will gradually create a pressure on the forex reserve,” said Ahsan H Mansur, the executive director of think-tank Policy Research Institute (PRI).
Central Bank data says $50.20 billion worth of LCs have opened in the first eight months of the fiscal, a staggering 60.71 percent higher over the same period last year.
PRI’s Mansur, however, says the upcoming national election may be a factor behind the soaring import cost and slumping export earning.
According to him, the government should look into the issue of capital flight by over invoicing.
Exporters may have opted to keep their earnings abroad in election year, he added.
With soaring imports and declining exports, the trade deficit stands at $13.20 billion in the first nine months of the fiscal, clocking almost a 100 percent hike from last fiscal’s $7.03 billion.
The rising trade gap has also pushed the current account deficit to a record level. Between July and March, it stood at more than $7 billion against $1.38 billion a year ago.