Bangladesh trade deficit hits record $30.81bn

Bangladesh's exports have grown at a record rate in 2021-22, but import costs have been higher and remittances have fallen sharply, sending trade deficit to an all-time high of $30.81 billion until May with a year-on-year growth of 48.83 percent.

Staff Correspondentbdnews24.com
Published : 4 July 2022, 07:03 PM
Updated : 4 July 2022, 07:03 PM

These have also impacted the country's Balance of Payment or BoP deficit, which has reached record $17.23 billion, according to latest dada published by the Bangladesh Bank on Monday.

Serajul Islam, a spokesman for the central bank, blamed high import costs for the widening trade deficit, which in May increased by nearly 11.3 percent from April.

"Exports have grown but not much comparing to imports," he said, adding that global price rises impacted imports while a devaluation of the taka against the US dollar affected exports. Remittances also fell, he noted.

The widening trade and BoP deficits have put pressure on Bangladesh's foreign currency reserves. Serajul mentioned measures taken by the central bank to save foreign currency by discouraging imports of luxury goods.

Analyst Ahsan H Mansur said it was assumed that trade deficit would increase. He suggested measures to cut demand, such as raising prices of power and gas so that the consumers become aware and spend cautiously.

Mansur, executive director of Policy Research Institute, added that prices of daily necessities, such as rice, must be kept in check. The government should focus more on controlling inflation than increasing GDP growth rate.

"The government is already treading that path," he said, noting that it suspended spending on "less important" projects.