BB projects lower trade deficit in FY19

FE Online Report | Published: February 02, 2019 13:08:37 | Updated: February 06, 2019 21:07:52

The Bangladesh Bank seal is pictured on the gate outside the central bank headquarters in Motijheel, the bustling commercial hub in capital Dhaka. FE Photo

Bangladesh Bank has projected that deficit on merchandise trade in the country would drop moderately in the current fiscal year (FY19).

In its outlook on Balance of Payments (BoP), the central bank has mentioned that merchandise trade gap may reach $17.27 billion in the current fiscal year, which was $18.26 billion in the past fiscal year.

The outlook was unveiled in the latest monetary policy statement on Wednesday.

Trade deficit during the first five months of the current fiscal year, however, stood at $6.66 billion, according to the central bank statistics.

It also showed that current account deficit might come down to $6.38 billion in the current fiscal year, which was $9.70 billion in FY18.

At the same time, deficit in service trade stood at $1.26 billion.

Bangladesh Bank has further projected that gap in service trade would came down to $3.53 billion in the current fiscal year, which was $4.57 billion in FY18.

“Current account deficit is expected to moderate to below 2 percent of GDP, in line with the sustainable norm for an emerging market economy at Bangladesh’s current phase of development,” it said.

“Higher exchange rate flexibility could provide additional support to the ongoing moderation of current account deficit,” it added.