Bangladesh narrows trade deficit by 41.63% after import restrictions

[Destranator]

Bangladesh narrows trade deficit by 41.63% after import restrictions​

By Staff Correspondent

Published:11th May, 2023 at 1:32 AM

Bangladesh’s trade deficit has narrowed to $14.61 billion by the end of March – 41.63 percent less than what it was a year ago, with restrictions on imports to shore up depleting reserves.

Current account balance deficit in the first nine months of the 2022-23 fiscal year has also decreased to $3.64 billion from $14.34 billion compared with the July-March period of 2022 – a 74.62 percent fall, according to updated data published by the Bangladesh Bank on Wednesday.

After the government imposed restrictions on imports to save dollars, the country’s import costs fell by 12.33 percent to $53.93 billion in the July-March period over the same period last fiscal year.
Bangladesh has shown resilience in maintaining export growth throughout most of the current fiscal year despite disruptions in the global economy. Exports in the first nine months increased by 7.76 percent to $39.32 billion.

A clear picture of the status of a country’s foreign transaction situation can be obtained via the status of its current account balance. Detailed data on regular income and expenditure including import and export are usually included in the balance. If the account has a surplus, the country does not have to undertake any debt for current transactions. If there is a deficit, a loan becomes inevitable.

Bangladesh opened the 2022-23 fiscal year with a record 33.24 billion trade deficit and $18.69 billion current account deficit amid the Russia-Ukraine war.

As the ripple effects of the war and the sanctions and counter-sanctions continued to batter Bangladesh’s economy, the authorities put restrictions on spending and sought long term support from the International Monetary Fund and other agencies to avert a full-blown economic crisis.

In its country report on the approval of $4.7 billion loans for Bangladesh, the IMF said the current account deficit of the country sharply widened to 4.1 percent of GDP in FY22 from 1.1 percent of GDP in FY21.

Given strict import controls, the current account deficit is expected to improve to 3.2 percent of GDP in FY23, it added.

Bangladesh narrows trade deficit by 41.63% after import restrictions

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Covid and ukraine war together have had a major impact and will continue to do so.

BD economy has not collapsed, its foreign reserve has gone down and had not fallen to dangerous level.

Economy is still growing.

Naysayers and doomongers with short vision continue to be proved wrong and I believe will ultimately be proved wrong.

that is not too say things are rosy, we have a ticking timebomb with bad debts in our banking sector caused by BAL goons, the restriction on imports will have badly impacted business and additional internal and external borrowing will reduce economic growth. We have a double digit inflation running currently and facing a difficult election scenario.

I remain however hopeful and have faith in the resilience of our economy and people.

 

[Destranator]

Covid and ukraine war together have had a major impact and will continue to do so.

BD economy has not collapsed, its foreign reserve has gone down and had not fallen to dangerous level.

Economy is still growing.

Naysayers and doomongers with short vision continue to be proved wrong and I believe will ultimately be proved wrong.

that is not too say things are rosy, we have a ticking timebomb with bad debts in our banking sector caused by BAL goons, the restriction on imports will have badly impacted business and additional internal and external borrowing will reduce economic growth. We have a double digit inflation running currently and facing a difficult election scenario.

I remain however hopeful and have faith in the resilience of our economy and people.

Bang on. Could not have put it better myself.