Trade surplus

MARKING an apparent turnaround in the usual trend, Bangladesh recorded a trade surplus in July this year as its imports declined sharply compared to exports.

The exports figure at US$2.96 billion clearly overshot the value of imports at US$2.27 billion, But the fact remains that the imports in this July was 11.36 per cent less than that of July 2013. Notably, the exports, too, registered a decline of more than one per cent relative to July last year.    

Evidently, what looks like trade surplus veils sluggishness in the overall performance of business during the month under consideration.

Seeing that both exports and imports have not performed well, the surplus is a little deceptive.  

Leaving aside the export figure, falling import is definitely an indicator of sluggishness in growth reflective of lack of investment in the economy, both domestic and foreign.  

At this point, a look at the vital imports may be worthwhile. The import of capital machinery, for example, fell in July by 13 per cent, as informed by a central bank official. And as if to match it, raw material import, too, declined by 11 per cent.  There is reason to be concerned about these import figures, if only because they point to a slack in industrial activity.

The paradoxical trade figure of July should serve as wakeup call for the policymakers. They must get their act together and stimulate business by removing all roadblocks to investment, both local and FDI.