Bangladesh's trade deficit surged by 51 percent to $7.52 billion in the fiscal year 2007/08, reflecting the soaring cost of food and fuel imports, central bank officials said on Tuesday. The cost of food grain imports quadrupled from a year ago between July 2007 and June 2008 due to sharp rise in global food prices and local supply shortages after floodings and a deadly cyclone destroyed nearly 3 million tonnes of rice and wheat.
"We had to import a huge quantity of rice after crop losses due to last year's natural disasters when the price per tonne of rice soared to $1,000 from $400 per tonne," a senior Bangladesh Bank official said. Imports in fiscal 2007/08 increased by 25.6 percent from last year, while exports rose 15.87 percent, the central bank said.
"At the same time, an abnormal rise in the price of fuel and fertiliser in global markets have substantially increased the country's import costs, while export earnings failed to reach target," the official said.
Rocketing food prices also pushed the impoverished South Asian country's annual consumer price inflation into double digits through the 2007/08 fiscal year, officials said. Officials said strong remittances from more than 5 million Bangladeshis working abroad helped offset the impact of the trade shortfall and kept the overall balance of payments in surplus. The balance surplus was only $604 million compared with $1.49 billion a year earlier. Bangladesh received $7.9 billion in remittances in 2007/08, nearly a third higher than the previous fiscal year.
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