Trade deficit widened to $12.5b in July-November

Under growing import pressure, trade deficit widened to $12.5 billion during the first five months of the current financial year.
The current account deficit also widened to $6.19 billion at the same time (July-November, FY22) though the financial account shows positive growth of foreign direct investment. Bangladesh Bank's (BB) latest trade figure highlight as on December 4, this year.
According to BB's data the country's import during July-November period of this year was $31.17 billion against its export earnings of $18.64 billion. During the first five months of the running fiscal import is 53.97 per cent higher over the corresponding months of last fiscal and in the same time export is 22 per cent higher over the same period in financial year 2020-2021.
Workers remittance in first five months fell by 20 per cent compared to first five months of the last fiscal (FY21) the central bank data says. Due to slow inward receipt of remittance the current account deficit widened further and it is now negative at $6.19 billion which was positive $3.56 billion in July-November last year.
Few days back a delegate of International Monetary Fund visiting Bangladesh said the country's current account deficit may widen further as import is growing. A senior BB official said the trade deficit may widen further as import pressure is rising after prolonged pandemic shock. The slowdown in remittance is further adding to negative trade deficit. It may further rise as the world is newly hit by Omicron pandemic.
He said despite slow growth in foreign direct investment and overall negative balanced of payment the foreign currency reserves at the central bank is satisfactory at around $45 billion. With these reserves the country is capable to pay 6.1 month's import bills instead of standard 3 months.
The BB data also shows during the first five months from July-November foreign loans, donations and other assets were in positive adding to growing reserves with the central bank.
It also shows the overall balance of payment in July-November of the running fiscal rose to negative $2 billion which was at 5 billion positive during the same time last year.
Mirza ABM Azizul Islam a former finance adviser of the caretaker government said no one knows when the negative trend in balance of payment will improve. He said the government should be aware of the growing trade deficit and devise policies if it continues to widen.