Bangladesh trade deficit down on lower imports

DHAKA, Oct 26 (Reuters) - Bangladesh's trade deficit dropped to $500.35 million in July-August from $1.25 billion in the same period last year as imports fell due to the global economic slump, a central bank official said on Monday.

The trade gap in the last fiscal year that ended in June 2009 was $6.94 billion after hitting $7.52 billion in 2007/08 because of the soaring cost of food and fuel imports.

Imports in the first two months of the 2009/10 fiscal year decreased by 20.4 percent from last year, while exports fell 3.3 percent, the central bank said.

"Imports slowed as global commodity prices including oil and food fell sharply due to the global economic meltdown," the central bank official said.

Exports also declined as demand weakened for key items including prime ready-made garments -- which earn more than $11 billion for the cash-strapped economy -- in the recession-hit U.S. and European markets.

Officials said strong remittances from more than 6 million Bangladeshis working abroad helped offset the impact of the trade shortfall and kept the overall balance of payments in surplus.

Bangladesh received $2.7 billion in remittances in July-September against $2.3 billion in the same period of last year. ($1 = 69.15 taka) (Reporting by Ruma Paul; editing by Chris Pizzey) (ruma.paul@thomsonreuters.com; +880-2-8330123; Reuters Messaging: ruma.paul.reuters.com@reuters.net;))