Bangladesh’s trade deficit shrinks by nearly 29% YoY from Jul-Jan 2023

The country’s exports in the same period rose by nearly 10 per cent YoY to $30.64 billion. Meanwhile, imports decreased by 5.66 per cent to $44.03 billion when compared to the same period the previous fiscal year. The current account deficit also reduced by almost 51 per cent to $5.03 billion, according to local media reports.

Bangladesh’s trade deficit has decreased by 28.8 per cent YoY to $13.38 billion in the July-January period due to the central bank’s import restrictions and the government’s austerity measures to save dollars. However, the trade deficit has increased by 8.82 per cent from $12.3 billion in the first half of the financial year, as per central bank data.

The current account balance shows a clear picture of a country’s foreign transaction situation, including imports and exports as well as regular income and expenditure. If the account has a surplus, the country doesn’t have to take on any debt for current transactions. But if there is a deficit, the country has to take a loan.

Bangladesh opened FY2022-23 with a record trade deficit of $33.24 billion and a current account deficit of $18.69 billion amid the Russia-Ukraine war. As the war’s ripple effects continued to damage the country’s economy, the authorities restricted spending and sought long-term support from the International Monetary Fund (IMF) and other agencies to prevent an economic crisis.

According to the IMF’s country report on the approval of $4.7 billion in loans for Bangladesh, the country’s current account deficit widened drastically to 4.1 per cent of the gross domestic product (GDP) in FY2022 from 1.1 per cent of GDP in FY2021. However, with strict import controls, the current account deficit is expected to improve to 3.2 per cent of GDP in FY2023.

Fibre2Fashion News Desk (NB)