Trade deficit in July –– the first month of the current FY23 –– hit $1.98 billion, despite regulations to lower imports.
The deficit is $628 million or a 46.41% increase from $1.35 billion in the same month of the last fiscal.
Skyrocketing import costs – due to an increase in the prices of goods in the international market and the appreciation of dollars against taka in the outgoing fiscal year – have widened the trade deficit.
However, since the beginning of this fiscal year, the import payment is decreasing, while remittance inflows are increasing. If the trend continues, the reserves will become stable.
According to the central bank's monthly balance of payments report, imports in July of fiscal 2022-23 stood at $5.86 billion, which is an increase from $4.75 billion in the same month of the previous year.
Inbound shipments started to slow down in July after the Bangladesh Bank had tightened import policies to save foreign exchange reserves amid rising dollar prices.
Import in terms of LC (Letter of Credit) settlement dropped 20% in August from the previous month.
LC payments stood at $5.93 billion in August, a drop from $7.42 billion in the previous month, according to the Bangladesh Bank report.
At the end of fiscal 2021-22, the trade deficit stood at $33.25 billion – the highest in the history of the country - and the deficit in the current account balance exceeded $18.5 billion.
According to the central bank data, exports increased by 33.45% and imports went up by 35.95% in the last fiscal year. The country earned $49.25 billion from exports and spent $82.50 billion on imports in 12 months through June this year.
In July this fiscal year, the current account deficit stood at $321 million, which is an increase from $293 million in the same month a year ago.
The current account faced a large deficit of $18.69 billion in the outgoing fiscal year, which is a staggering increase from just $4.57 billion in fiscal 2020-21.