The New Nation - Internet Edition

Staff Reporter

Despite positive growth in export, the country's trade deficit widened to US$ 4.26 billion in nine months of the ongoing fiscal year, thanks to higher import of essential items including food grains and petroleum products.

The overall import grew by 24. 37 per cent during July-March period of fiscal 2007-08 over the same period of the previous fiscal while export earnings marked a 12.43 per cent growth over the same period a year ago.

The trade gap is likely to be enlarged further in coming days, as soaring global food and fuel prices have been swelling the country's import costs, some officials in the Bangladesh Bank said. The International Monetary Fund (IMF) has already projected that the trade deficit, which ranged between US$2-3 billion over the past decade, will reach around US$6 billion in this fiscal.

Bangladesh's trade imbalance will be US$5.59 billion for FY08 compared to US$3.45 billion in FY07, IMF said in a report last week.

The high trade imbalance is also putting pressure on the country's current account balance. Current account balance, which had around US$1 billion surplus in the last fiscal year, is likely to run to deficit this year.

The Government has sought financial support of IMF to cope with the current account balance, sources concerned said.

"The pressure on the balance of payments has intensified significantly and our current account balance is now negative for the first time in several years," Finance Adviser Mirza Azizul Islam said in a letter to the IMF recently.

During July-March period of this year, the import of food grains and other consumer goods scaled up by 261.30 per cent and 40.32 per cent respectively over the same period of the previous fiscal.

The import of food grains stood at US$1.200 billion during the period as against US$332.21 million of the corresponding period of last fiscal, the BB's data showed.

Letters of credit (LCs) against imports worth US$14.644 billion were settled during this period against US$11.775 billion of the corresponding period of the previous fiscal, according to the central bank statistics.

Besides, import of industrial raw materials witnessed a 27.15 per cent growth against the same period of the previous fiscal to US$5.622 billion while the import of industrial spares and accessories reached US$1.035 billion against US$870.96 million during the period.

On the other hand, the country fetched US$10.2 billion in export during the July-March period of fiscal 2007-08 against US$358.52 million export earnings target, the figures released by Export Promotion Bureau (EPB) says.

The export volume of Bangladeshi products increased by nearly 14 per cent while the price of exportable products fell 1.5 per cent, the EPB data showed.

In March, exports surged 21 per cent from a year earlier to US$1.22 billion, indicating an increase in the volume of sales. Knitwear items grew by 17.3 per cent to US$3.9 billion while woven items grew 7.5 per cent to US$3.8 billion amid a massive surge in export orders. Frozen food, the third largest export item, grew 7.3 per cent to US$408 million.