The deficit narrowed due to a better export growth than previous year and expected remittance earnings
The country’s trade deficit fell by 14.76% year-on-year to $15.49 billion in the last (2018-19) fiscal year, thanks to a steady growth in export earning, remittance earnings and a slowdown in import growth.
The deficit narrowed due to a better export growth than previous year and expected remittance earnings, said Zahid Hussain, former lead economist of World Bank, Bangladesh.
He said export increased owing to the ongoing trade war between China and the USA.
"So in future, if the war ends, the growth may be sustainable or not. For this, export should be diversified," he pointed out.
In the last fiscal year, food import declined due to improved food production, he mentioned, adding that import of capital machinery on the other hand declined for lack of a sound investment environment.
According to central bank data, trade deficit eased in FY 19 as import grew by only 1.79% against the export earnings growth by 10.09% during the period.
Import payments stood at $55.44 billion from $54.46 billion in the same period of FY18.
According to the data, export earnings stood at $39.95 billion in FY19 against $36.29 billion in the same period of FY18.
Bangladesh’s overall merchandise export earnings have registered a 10.55% growth to $40.53 billion in the just concluded fiscal year, riding mainly on apparel exports, according to the provisional data of Export Promotion Bureau (EPB).
Readymade garment (RMG) sector has contributed 84.21%, or $34.13 billion to the total export receipts. The sector posted 11.49% growth over last fiscal year, bagging $30.61 billion from apparel items.
Apparel sector exceeded the export target by 4.42%, as the estimated earnings from RMG were set at $32.68 billion for 2018-19 fiscal year.
“Currently, the apparel industry is safer than in the past. This is only because of the safety improvement and compliance, which boosted global buyers’ confidence,” BGMEA former senior vice president Faruque Hassan has told Dhaka Tribune.
As of August 14, foreign exchange reserves stood at $32.35 billion due to the rising trend of export earnings, and remittances.