Bangladesh’s trade deficit widens 38% in July

Bangladesh’s trade deficit, the gap between what it buys and sells abroad, widened by 38.36 percent to $2.08 billion in July, the first month of the current fiscal year, mainly due to high import growth amid negative export growth.

The trade deficit was $1.50 billion in the same month of the last fiscal year.

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According to Bangladesh Bank (BB) data, import bills rose 8.6 percent year-on-year to $6.44 billion. At the same time, export earnings slipped 1.6 percent to $4.35 billion.

Among the import bills, petroleum goods imports rose by 83.3 percent to $1.37 billion in July of FY27.

Industry insiders said import bill payments have increased in recent times due to the rise in oil prices caused by the US-Israel war with Iran.

Besides the trade gap, the country’s current account balance fell to $66 million in July from $125 million in the same month of the last fiscal year.

The current account balance in the BoP measures the net flow of a country’s goods, services, income and transfers with the rest of the world.

However, in July of FY27, the financial account deficit narrowed to $677 million from $746 million in the same month of last year.

The financial account covers claims or liabilities to non-residents concerning financial assets, and its components include foreign direct investment, medium- and long-term loans, trade credit, net aid flows, portfolio investment and reserve assets.

In the financial account, net FDI fell to $116 million from $122 million, data showed.

The country’s overall deficit increased to $633 million in July of FY27 from $545 million in the same month of the last fiscal year, data showed.