DHAKA: The trade deficit at the end of fiscal 2016-17 stood close to $9.5 billion, the largest in seven years, according to data released by Bangladesh Bank on Wednesday. The deficit widened near the end of the year as import spending increased faster than export earnings, said Zaid Bakht, a leading economist.
Bangladesh spent $43.49 billion on imports and earned $34.02 billion in exports in FY2017, which ended on Jun 30, according to central bank data. This sets the trade deficit at $9.47 billion, a 47 percent increase over the deficit in FY2016. The latest deficit is close to the record level of $9.94 billion in FY2011. Import spending rose 9 percent since last year, while export earnings have increased 1.73 percent. The stark difference from recent years is due to rising import spending, said Zaid Bakht, the research director at the Bangladesh Institute of Development Studies. The relatively low price of oil and food on the global market in recent years, coupled with rising exports, had kept the deficit in check in recent years, he said. But the deficit has widened now, with oil prices hovering around $55.6 a barrel and more capital machinery imported for major projects. The deficit in services rose from $2.71 billion in FY 2016 to $3.28 billion in FY2017. However, according to Bangladesh Bank, foreign direct investment has risen by 19.3 percent from the previous fiscal year.