The trade deficit decreased by 20.77 per cent in first ten months of fiscal 2023-24.
According to the data, the trade deficit came down to $1,896 million in first 10 months of fiscal 2022-23 from $2,360 million.
In first ten months of 2022-23, Bangladesh exported goods and services worth $3,367 million and its imports were to the tune of $5,237 million.
Those concerned say that when the dollar crisis occurs in the country, the central bank discourages import of several products including luxury goods. This control has played a role in reducing the trade deficit. They think that other indicators should also be looked at.
Economist and Executive Director of Policy Research Institute (PRI) Ahsan H Mansur said that if the trade deficit increases, there will be pressure on the reserves. Due to this the trade deficit has been reduced by controlling imports. Not only should imports be reduced. Keep an eye on all the indicators including keeping the financial account low.
Sources said, in the current (2024-25) fiscal year, the government suspended foreign travel to attend workshops and seminars spending government money.
Also purchase of all types of vehicles will be stopped. Besides, initiatives have been taken to reduce spending on gas and fuel.
In the context of the current global economic situation, to slash government expenditure in fiscal 2024-25, travel by officials of ministries and departments and their subordinate directorates, inspectorates, offices, autonomous bodies, public sector corporations and state-owned companies has been banned.
Purchase of vehicles by these offices has also been banned by spending money from operational and development budget.
On Thursday, the finance division of the finance ministry issued instructions in this regard. It was signed by Deputy Secretary Helal Uddin.
It banned foreign travel to participate in workshops and seminars spending government money.
It, however, allowed foreign travel in some cases with permission from appropriate authorities.
Several other indicators are comfortable for Bangladesh with the trade deficit shrinking in the post-corona-stressed economy.
At the end of April, the current account balance of foreign transactions stood at a credit of $ 5.72 billion, which was only $4.07 billion a month ago.
At the end of the first ten months of fiscal 2022-23, the deficit was $1,180 million.
A current account deficit means that regular transactions have to be met by borrowing. And having a surplus means that the country does not have to borrow for regular transactions.
During this period the overall balance (overall balance) deficit also decreased slightly. In July-April, there was a deficit of $5.56 billion. The deficit at the end of April for the 2022-23 fiscal year was $8.8 billion. Overall balance deficit decreased by $3.24 billion or 36.81 per cent in one year.
At the same time, Bangladeshs earning from the service sector declined. Earning from the service sector stood at $518 million. And $823 million was spent by this sector. That is, the deficit in the service sector at this time stood at $305 million.
Net foreign direct investment (FDI) in the first ten months of the last fiscal was $3.59 billion, compared to $3.72 billion during the corresponding period of the previous fiscal year. In other words, FDI decreased slightly during the period under discussion.
Bank officials say that dollar crisis in the country was evident in 2022. After that, Bangladesh Bank imposed restrictions on imports. This resulted in opening fewer letters of credit (LCs).
Traders are now reaping the benefits of these initiatives. If this trend continues, they hope that the trade deficit will be reduced sharply.
Economist Dr Zahid Hossain said "Even after adjusting our remittances, there is still a big deficit in current account mainly due to imports surpassing exports."
