Bangladesh's trade deficit was almost halved to over three and half a billion U.S. dollars in the first half of the current 2012-13 fiscal year (July 2012-June 2013) , as slump in imports outweighed the impact of fewer exports, a Bangladesh Bank (BB) official said.
Quoting provisional BB data, the official said the South Asian country exported 12.34 billion U.S. dollars of goods while it imported items worth 16.06 billion dollars during the first six months of the current fiscal year (July 2012-June 2013).
As imports greatly surpassed the sum of exports, he said Bangladesh's trade deficit during the first half of the last 2011- 12 fiscal year (July 2011-June 2012) swelled by about 60 percent year-on-year to nearly 6 billion U.S. dollars.
Apart from the impact of a "restrained monetary policy", the BB official said on condition of anonymity that the second bout of global financial turbulence is to be blamed for both export and import slowdowns in July-December period of the current 2012-13 fiscal year.
Bangladesh's July-November trade deficit also constricted by over 22 percent year-on-year to 3.49 billion U.S. dollars amid global financial woes, he said.
Official statistics showed Bangladeshi imports in the first six months of 2012-13 fiscal year plunged nearly 7 percent from that of July-December, 2011-12 fiscal year (July 2011-June 2012), while year-on-year exports growth dipped to 6.47 percent in the same period.
Bangladesh's exports and imports, which usually hover around 20 to 40 percent growths, also sank as the central bank pursued a " restrained monetary" growth path during July-December 2012 to check inflation and external sector pressures in the wake of global financial turbulence, he added.
A decreased import trend in capital machinery and industrial raw materials in the first half of 2012-13 have reportedly pushed a significant reduction in trade deficit.
In the first half of the current fiscal year, the BB data showed growth in settlement of letters of credit (LCs), generally known as actual imports, for industrial raw materials and capital machinery dipped 5.30 percent and 23.68 percent respectively compared with their 16.19 percent and 31.87 percent growths in the same period a year earlier.
Analysts say narrowing trade gap at this stage is not good for Bangladesh when it needs to go for huge industrialization to reach its development targets.
The BB official, however, expressed the hope that trade deficit will likely widen again as the half yearly monetary policy, spanning from January to June 2013, is designed to ensure that the credit envelope is sufficient for productive investments to support the attainment of the government' s fiscal 2012-13 real GDP growth target.