Trade deficit widened in the first nine months of this fiscal year on the back of lower exports and higher imports, bucking the recent trend.
Between July and March, trade deficit stood at $4.94 billion. In March alone, it rose by $1.38 billion, data from Bangladesh Bank shows.
Imports grew by 11.09 percent in the first nine months of fiscal 2013-14 but in March alone the growth was 54.47 percent. Exports grew by 13.46 percent during the period but in March it rose only 4.79 percent.
Meanwhile, the current account surplus dropped around 42 percent to $1.51 billion in the first nine months of the fiscal year owing to a decline in remittance inflow.
Zahid Hussain, lead economist at the World Bank's Dhaka office, said the main cause of increase in deficit is the low export growth in March.
In April, export growth peaked and the declining trend in remittance inflow was also closing up, so there will be a marked improvement in the figures. The latest data shows that exports grew by more than 16 percent last month.
Hassan Zaman, chief economist of BB, said there is nothing alarming about the slight deterioration in the current account balance, which, after all, is still a positive number.
“Moreover, countries at our stage of development often run current account deficits in order to finance the imports required for infrastructure development and industrial growth.”
“Given that the foreign exchange reserves are more than adequate, I would not be too worried even if we had a small current account deficit, so long as it is financing the capital equipment imports required for economic growth.”
The country's foreign currency reserves are still over $20 billion.