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Trade deficit up 53% in July-April of FY22

bluesky

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Trade deficit up 53% in July-April of FY22​

This also exceeded last year's total shortfall

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Tribune Desk
June 4, 2022 10:57 PM

Bangladesh's trade deficit ballooned up 53% year-on-year to $27.5 billion in the July-April period of the ongoing fiscal year 2021-22 as imports overshadowed exports. This also exceeded last year's total shortfall.

Bangladesh paid $68.67 billion in import bills in the 10 months ending in April, when export earnings stood at $41.10 billion, according to data from the Bangladesh Bank.

The amount of deficit from the country's overseas trade crossed the previous peak of $23.7 billion, registered last fiscal year, thanks to steep import bills resulting from soaring commodity prices in the international market.

With its inadequate domestic production, Bangladesh has to import a number of key commodities, namely wheat, edible oil, sugar and pulses.

The country also has to import petroleum, industrial raw materials and intermediate goods to run both its domestic market and export-oriented industries.

Imports, which slowed in the last two months, were still 41% higher year-on-year in the July-April period whereas exports grew 35% at the same time.

The gap against the backdrop of a drop in the inflow of remittance, a major pillar of Bangladesh's $465 billion economy, worsened the availability of foreign exchange to finance imports and increased pressure on once comfortable foreign exchange reserves.

Current account deficit ballooned over nine times year-on-year to $15.30 billion, the highest on record, in the July-April period of the current fiscal, central bank data showed.

The previous widest deficit in the current account was the $9.56 billion recorded in FY18. The amount of imbalance was $4.5 billion last fiscal year.

Overall balance with regard to the external account also became negative until this fiscal year from positive balances in the last two fiscal years, according to the data
 
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Bangladesh's trade deficit ballooned up 53% year-on-year to $27.5 billion in the July-April period of the ongoing fiscal year 2021-22 as imports overshadowed exports. This also exceeded last year's total shortfall.
By interpolation I find the FY deficit will be more than $33 billion. Part of this deficit can be paid by the money received from the remittance. It will still be $13 billion deficit overall.

This kind of deficit is very normal for a developing country because it has to import many items. However, importing luxury items should be kept at the minimum and more dollars should be used to import machines, raw materials and fuel.
 
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By interpolation I find the FY deficit will be more than $33 billion. Part of this deficit can be paid by the money received from the remittance. It will still be $13 billion deficit overall.

This kind of deficit is very normal for a developing country because it has to import many items. However, importing luxury items should be kept at the minimum and more dollars should be used to import machines, raw materials and fuel.
No concern as long as the direction is right, exports rising, manufacturing rising, infra rising. Vietnam ran decades of deficits before runs surpluses. more concerning if imports collapsing. See Russia. The imports collapse by 50 percent. They can’t import essential goods.
 
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No concern as long as the direction is right, exports rising, manufacturing rising, infra rising. Vietnam ran decades of deficits before runs surpluses. more concerning if imports collapsing. See Russia. The imports collapse by 50 percent. They can’t import essential goods.

Key metric is the dollar reserves.

As long as you earn more than you spend - no issues. You can even afford a small deficit in the medium term - financed through cheap loans.

Exports is only one way a nation earns foreign currency.

Remittance, repatriation of profits, selling of assets etc are others.

Btw, very few nations run a trade surplus.
 
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Key metric is the dollar reserves.

As long as you earn more than you spend - no issues. You can even afford a small deficit in the medium term - financed through cheap loans.

Exports is only one way a nation earns foreign currency.

Remittance, repatriation of profits, selling of assets etc are others.

Btw, very few nations run a trade surplus.
Correct, the more dollars the better. Let’s other dummies do there jobs when they say they shun the dollars. Other key metric is investment. The money ispent on investment shall exceed those on consumption. Jeff the chief guru of Amazon once said he never had sleepless nights although his company ran losses for years. Why? He said because the losses were resulted in massive spendings on infra investments.
 
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Correct, the more dollars the better. Let’s other dummies do there jobs when they say they shun the dollars. Other key metric is investment. The money ispent on investment shall exceed those on consumption. Jeff the chief guru of Amazon once said he never had sleepless nights although his company ran losses for years. Why? He said because the losses were resulted in massive spendings on infra investments.

Plus the Amazon losses were plugged by loans and equity sale.

Amazon went through multiple funding rounds which diluted shareholdings.

But value of each share went up and up.

Exactly what nations also go through…
 
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