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The trade deficit of Bangladesh, which shows the amount by which the value of the country’s exports fell short of its import bill, widened by 38.36 per cent to $2.08 billion in July, mainly due to high import growth amid a contraction in exports, according to a report in Dhaka-based The Daily Star newspaper. 

The trade deficit was $1.50 billion in the same month of the last financial year.

According to Bangladesh Bank (BB) data, the country’s import bill rose 8.6 per cent year-on-year to $6.44 billion. At the same time, export earnings fell by 1.6 per cent to $4.35 billion.

Among the imports, petroleum goods imports rose by 83.3 per cent to $1.37 billion in July of FY27 as the Middle East conflict and the choking of the Strait of Hormuz led to a spike in global prices of crude oil and petroleum products.

Industry insiders said import bill payments have increased in recent times due to the rise in oil prices caused by the US-Israel war with Iran, the report states.

Besides the trade gap, the country’s current account balance fell to $66 million in July from $125 million in the same month of the last fiscal year.

The current account balance in the balance of payments (BoP) measures the net flow of a country’s goods, services, income and transfers with the rest of the world.

However, in July of FY27, the financial account deficit narrowed to $677 million from $746 million in the same month of last year.

The financial account covers claims or liabilities to non-residents concerning financial assets, and its components include foreign direct investment, medium- and long-term loans, trade credit, net aid flows, portfolio investment and reserve assets.

In the financial account, net FDI fell to $116 million from $122 million. The country’s overall deficit increased to $633 million in July of FY27 from $545 million in the same month of the last fiscal year, the report added.