Althrough the performance of the country's external sectors including remittance & export is still strong, exporters & economists have warned that the sectors will soon feel the negative impacts of the global financial meltdown. The economists said to turn away the recession fallout, measures should be incorporated in the next budget for increasing domestic demand to creat employment. Current account balance in the first eight months (july-february) of this fiscal year increased by 172 percent & stood at $816 million against $299 million in the same period of the previous fiscal year. A central bank high official said although growth fell in the recent months, the overall remittance & export performance is still satisfactory, leading, leading to an improved current account balance. The foreign currency reserve has crossed $6 billion, & on middle of the may it stood at $6.29 billion. But warning bells have begun to ring from different corners that the external sector may face setback. The World Bank in its recent report released last month said "there are a number of worrying signs." Export volatility appears to have increased with growth rates fluctuating widely, buyers are pressing for higher discounts, orders are being deferred & the threat from competitors to Bangladesh in traditional apparel markers has become stronger, the World Bank said. Research Director of Bangladesh Institute of Development Studies (BIDS) Zaid Bakht said if the export on remittance drops, employment has to be created for the expatriates who would lose job owing to slow down in exports. He also said the government is probably going for an aggressive expansionary fiscal policy. A big size budget is going to be presented. It would increase government expenditure, which in turn will increase domestic demand, he added. However, Bakht said there is a risk factor. If the revenue earning doesn't increase, govt borrowing will go up & so will inflation. He suggested that revenue earning should be increased & emphasis should be given to quality expenditure. Trade deficit was 60% last fiscal year over the previous year but in july-february period of the current fiscal year it went up by 15%. In the eight month period the amount of trade imbalance was $3560 million against $3087 million in the same period of the last fiscal year. In the first eight months of the current fiscal year export grew by 15.90 %, which was 11.10 percent in the same period last fiscal year. However, in the same period import grew by 15.55% against 21.02% in the corresponding period of last fiscal year. Another major cause of a healthy current account balance is strong remittance growth. In the last ten months of the current fiscal year, remittance growth was 22.70%. In the period remittance inflow was $7890 million against $6430 million last year. Around 63% remittance come from the Middle Eastern countries. Industry insiders anticipate that the impact of global financial crisis in Saudi Arabia & Gulf Cooperation Council (GCC) countries will lead to restrictions on foreign workers & visas. Banladeshi think tank Refugee & Migratory Movement Researen unit fore casts that the country may also face decline in remittance inflows from the UK & US. Recent World Bank projection paints a grim picture for Bangladesh's exports, while Bangladesh Garments Manufacturers & Exporters Association said export orders of RMG products declined. However, both the price & volume of non RMG products are falling, said Export Promotion Bureau. In the july-march period of the current fiscal year export of pharmaceutical products fell by 15.92%, raw jute 19.62%, jute goods 17.98% & electronics by 56.90%.
---Collected By The DAILY STAR
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