The Covid-19 pandemic has rocked both Bangladeshi manufacturing sectors and supply chains in export destinations.
After the end of general holidays in the country, the central bank updated February, March, and April's balance of payment data in the last 11 days.
The country's trade deficit rose by 1.74 percent – or $243 million – year-on-year during July-April of fiscal year (FY) 2019-20 as export earnings took a Covid-19 hit, according to the latest data of the Bangladesh Bank.
Md Serajul Islam, spokesperson and an executive director of the Bangladesh Bank, told The Business Standard, "As banks did not remain fully operational during the government-declared general holidays, it became very difficult for us to prepare the balance of payment data."
Before the shutdown, the country's trade deficit in the first nine months of the current fiscal year fell by $123 million – or 1.01 percent – to $12.07 billion year-on-year.
The situation, however, changed during July-April of the FY 2019-20 with the country's trade deficit widening to $14.22 billion against $13.98 billion in the same period of FY19.
The big drop in export earnings in April increased the deficit.
In April, Bangladesh's export earnings dropped by 82.85 percent to $520.01 million from $3.03 billion in the same month of last year.
Imports also fell by 8.77 percent – or $4.13 billion – to $42.97 billion during July-April of FY20 from $47.11 billion in the same period of FY19.
The country's trade deficit may rise further in the coming months when all the export-oriented industries will resume operations in the post-pandemic period.
A turnaround in export earnings would largely depend on the resumption of full economic momentum in the country's major export destinations, experts said.
Even though many of the country's export destinations already started reopening after tackling Covid-19, the situation is still critical in others, they said.
Unless Covid-19 is tackled efficiently and the situation returns to normal, the buyers will not be interested in sourcing products from Bangladesh, they maintained.
The current account deficit, however, fell by 22.49 percent to $4.12 billion in the first ten months of the current fiscal year from $5.32 billion in the same period of FY19.
The inflow of remittances dropped by 25 percent year-on-year to $1.08 billion in April, registering a fall of $353 million from the same month a year ago.
It was $1.43 billion in April last year.
The country's overall balance stood at a surplus of $623 million during July-April of FY20, against a deficit of $590 million in the same period of the previous fiscal year.
The surplus overall balance will not sustain if the trade deficit and current account deficit widen, the experts warned.
During July-April of FY20, the net foreign direct investment dropped by 20.06 percent to $1.88 billion from $2.35 billion in the same period of FY19.