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Trade deficit likely to widen PDF Print E-mail
Sunday, 20 July 2008

Trade deficit might have widened to $6.5 billion in fiscal 2007-08, driven by higher import bills than in the previous years, despite bumper production of boro paddy, reports

According to data of the Export Promotion Bureau, Bangladesh imported products for $18.23 billion in the first 11 months of the last fiscal year and earned $12.64 billion by exporting goods.
Import bills for June this year recorded $1.99 billion, up from $1.71 billion a month ago, according to Bangladesh Bank data. Export earnings data for the month was not available.
The gap between import and export bills was $5.59 billion (Tk 38, 500 crore) in the first 11 months of the last fiscal year.
In June, $22.28 million was spent on rice and $34.21 million on wheat imports.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, said the trade deficit would surpass $6 billion.
Asked about the imports, finance adviser AB Mirza Azizul Islam told this correspondent that the government kept importing wheat to raise its stock considering the future market situation.
In the first 10 days of July, $6.97 million was spent on rice and $4.95 million on wheat imports.
A few days ago, the cabinet committee on public purchase approved import of one lakh tonnes of wheat.
Efforts were still on to get the five lakh tonnes of rice India promised to export to Bangladesh last year, the adviser said.
Mirza Aziz said the government attached priority to procuring rice and wheat from local markets.
Rice importer Mohammad Golam Moula, the general secretary of the country's largest wholesale market Moulavibazar Traders Association, said rice was being imported from Thailand, Pakistan and Myanmar after India had halted rice exports.
Bangladesh Bank information showed that the reserves had gone down to $5.40 billion from $6.21 billion after paying the March-April bills of Asian Clearing Union in the first week of the current month.
Mustafizur Rahman said the payment put pressure on the central bank's reserves despite hefty remittances.
He also said last year's floods and cyclone Sidr hampered the output of aman and aus paddy contributing to record import in a few months. He also blamed the price hike of essentials on the global market for the higher import bill.
Bangladesh Bank data showed that the trade deficit was $3.4 billion or Tk 23,474 crore in fiscal 2006-07 and $ 2.89 billion or Tk 19,941 crore in fiscal 2005-06.

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