The trade deficit in the first five months of the 2019-20 fiscal stands at nearly Tk 6.68 billion despite the cuts in import costs, says a central bank report.
Experts have expressed concern at the phenomenon blaming export income going down for the deficit.
Former caretaker government financial advisor AB Mirza Azizul Islam said that the country’s economy is under pressure.
“Many problems come up due to the economic strain and one of them is trade deficit,” he told Bangla Tribune.
He said that while import costs going down is good, capital machinery and industrial raw material export going down is a matter of concern.
According to the Bangladesh Bank, capital machinery export has reduced by 10 percent and raw materials export by 20 percent.
The bank says that every month $ 1 billion was being added to the deficit and import cost against export income was especially bad from July to November.
Bangladesh Institute of Development Studies (BIDS) researcher and Agrani Bank Chairman Dr Zayed Bakht does not see the increasing trade deficit as a matter of concern.
“Export has gone down but remittance is increasing. Moreover, import cost has also gone down,” he said.
He added that if exchange rate against dollar can be reduced, everything will be alright.
Bangladesh spent over $ 22 billion in importing products while the export turnover was $ 15.52 billion in the 2019-20 fiscal.
Moreover, the balance of payment deficit for the current fiscal stands at over $ 1 billion which was $ 2.42 billion last year.
However, Bangladesh has maintained surplus in the financial account with over $ 1.2 billion. The Foreign Direct Investment (FDI) has also maintained a positive trend with over $ 2 billion in the first five months of the fiscal and the net FDI $ 1.12 billion.