DHAKA (REUTERS) - Bangladesh's trade deficit narrowed by 26 per cent in the first eight months of fiscal 2012/13 compared to the corresponding period a year ago, helped by strong export growth in garments, a central bank official said.

"The increase in exports is a clear indication that the economy is moving forward," Mr Mohammed Allah Malik Kazmi, an adviser at the central bank, said.

Total exports in the first eight months of Bangladesh's July-June financial year increased by 9.4 per cent to US$17.4 billion (S$21.5 billion) compared with US$15.9 billion over the corresponding period of the last fiscal year.

Garments make up more than 80 per cent of Bangladesh's overseas shipments.

Imports, however, fell 1.5 per cent in the eight months to February compared to the corresponding period a year ago, as political unrest and power shortages curbed investment, officials said.

The trade deficit stood at US$4.47 billion.