Bangladesh’s trade deficit in the last F Y 2009-10 that ended in June ballooned nearly 10% year on year to over US$5B as import rebounded since April after months of slump in the wake of the Global economic recession.

The Bangladesh Bank (BB) data showed the country’s import payment stood at US$21.39B, up 5.41% in F Y 2009-10 (July 2009-June 2010) while earnings from export totaled US$16.24B, 4.2% higher, during the same period.

Analysts said Bangladesh’s trade deficit, which squeezed since May of the previous F Y 2008-09 (July 2008-June 2009), started to widen further from April, the 10 months of the last F Y 2009-10.

They said Bangladesh’s trade deficit squeezed in context of the global financial meltdown which takes toll on the country’s export industries causing lower import of capital machinery and raw materials.

The BB data showed the South Asian country’s import slump slowed to 1.47% in Q-3 (July-March) of the last 2009-10 FY after falling 5.92% in 1-Half and 19.18% in Q-1.

On the other hand, export slump eased to 0.84% in Q-3 after falling 6.82% in the 1-H and 11. 89% in Q-1 of the last fiscal year, official data showed.

Trade analysts said imports of capital machinery and raw materials also dropped as fresh investments from both foreign and local organizations in Bangladesh suffered huge setback amid acute power and gas shortages in capital Dhaka as well as many other parts of country.

The country reportedly experiences a shortage of up to 400 million cubic feet of gas each day. Due to lack of new power plants and uninterrupted gas supply to the existing gas-fired power plants, the country has a power supply shortfall of up to 1, 500 MW everyday.

Officials, however, said strong remittances from millions of Bangladeshis, living and working over 100 foreign countries, helped the country offset the impact of the trade shortfall and keep the overall balance of payments in surplus, which reached 2. 89 billion U.S. dollars in the last fiscal year.

Remittance from more than 6 million expatriate Bangladeshis in Y 2009-10 fiscal year totaled US$10.97B around 13. 20% higher than the same period a year ago, the central bank data showed.

With hefty growth in remittances, officials said Bangladesh’s foreign exchange reserves rose to a record 10.75 billion U.S. dollars at the end of July, the final month of 2009-10 fiscal year, despite trade gap widened to some extent.

Bangladesh’s trade gap in 2008-09 FY was US$4.71B vs. US$5.33B in the previous 2007-08 FY (July 2007-June 2008).

The country’s trade gap widened to a large extent in 2007-08 FY because of the soaring cost of fuel and food imports following the super cyclone Sidr and 2 consecutive floods in 2-Half of Y 2007.—Paul A. Ebeling, Jnr. www.livetradingnews.com

Posted by Shayne Heffernan on Aug 25th, 2010and filed underAsia, Equities, Latest News, Markets.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site