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Saturday, July 13, 2024

Higher imports and lower exports widen trade gap widens in Bangladesh

Bangladesh’s exports that are led by textiles and readymade garments continue to remain under severe stress, dropping by a massive 22 percent in April alone to $4 billion. The April deficit was above 140 percent or $3.6 billion compared to the preceding month of March.

According to the statistics released by Bangladesh Bureau of Statistics (BBS) the import costs increased nearly 15 percent to $7.6 billion, the data show, upsetting the balance of trade.

Experts say that exports are likely to continue to struggle as external demand for textiles and RMG from key trading partners remained subdued in recent months. Meanwhile, July-May export growth was just over 2 percent while the May export receipts recorded more than 16 percent negative growth over its previous period a year earlier.

Bangladesh is taking support from the IMF to stabilize its volatile forex market and macroeconomic challenges. The IMF has said Bangladesh’s economy continues to face multiple challenges. In its recent review the IMF stated that stubbornly high international commodity prices and continued global financial tightening have amplified macroeconomic vulnerabilities in Bangladesh.

In response to these pressures, the authorities have recently undertaken bold exchange-rate reforms, the IMF said in its statement released on June 24 in course of appraisal of the country’s creditworthiness ahead of release of each tranche of its $4.7-billion lending package.

The Executive Board of the International Monetary Fund (IMF) completed the second review under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF) arrangements for Bangladesh, allowing the authorities to withdraw about $928 million under the ECF/EFF, and about $220 million under the RSF.

This brings total disbursements under the ECF/EFF so far to about $1,856 million and under the RSF to about $439 million.

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