The New Nation - Internet Edition

AS appeared in media recently, country's trade deficit is 'widening at a rapid pace' and may reach the $6 billion level at the end of the current financial year. The deficit increased by $691 million in March last to $3.9 billion in the first three quarters of the year due to the rising import payments. According to economists, the deficit

would increase as the prices of almost all products went up sharply in the international market. The prices of fuel, fertiliser, food items including rice, wheat and edible oil and other commodities that are imported have risen exorbitantly in the international market and the trend may not change in the near future, economists say.

In the first nine months of current year, exports grew by 12.17 per cent to $ 10 billion but imports increased by 23.28 per cent to $13.96 billion as revealed by the Bangladesh Bank data. Export growth in the second half of the current fiscal year and robust inflow of remittance cushioned the shock and the current account balance has been positive. The current account has a positive balance of $ 390 million at the end of the third quarter, which was $ 605 million at the end of the same period of the last year. Export growth picked up by 30 per cent in the third quarter and export order flow for the fourth quarter.

The government should be very careful to ensure unhindered inflow of remittance that is expected this year to be around $ 8 billion as the trade deficit at the end of the fiscal year will be determined by the price of oil and essential commodities. If the prices continue to rise further, the trade deficit too will increase accordingly as feared by the economists.