Trade deficit expands 31% on rising import cost

The trade deficit of Bangladesh widened to 31% in the July-September quarter compared with the same period last year, owing to surging import bill.

The trade deficit hit $7.48 billion, according to central bank data revealed Thursday, piling pressure of foreign exchange reserves, and undercutting the capacity to pay for future imports as well as debt obligations.

Import cost sharply rose by 105% for overseas fuel purchases, while import bills for food items like edible oil and wheat also grew from last year.

In contrast, imports of capital machinery fell, signalling falling investor confidence.

Current account deficit rose to $1.33 billion from $821 million a year earlier.

Export earnings rose 7% to $11.86 billion but remittance inflow growth played the more noticeable role in limiting the damage from surging import bill. Remittance inflow grew 13% to $8.59 billion in the July-September quarter.