Dhaka, Bangladesh (BBN)- The country’s overall balance of payments (BoP) situation continued to maintain a healthy trend in the fiscal 2008-09 (FY09) in spite of the global meltdown, officials said Thursday.
The current account balance also recorded a surplus in the fiscal 2008-09 (FY09), thanks to robust growth of inward remittances, they added.
"We expect that the existing trend of current account balance along with the overall balance of payments will continue more or less in the first half of the current fiscal," Director General of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri told BBN in Dhaka.
He also said the country's overall import may pick up in the second half of the fiscal 2009-10 due to increasing trend of prices of major commodities in the international markets.
For the first time, the country's overall trade deficit fell by $24 million to $4.708 billion in FY09 from $4.731 billion of the previous fiscal, mainly due to the decreased prices of major importable commodities including fuel oil and food in the global market.
"The country's overall trade deficit reduced slightly in FY09 mainly due to easing of import pressure on the economy," Mujeri, also former chief economist of the central bank, said, adding that export earnings, which were good, contributed to minimize the trade gap.
In FY09, export earnings stood at $15.583 billion against the import payments of $20.291 billion, the BB's data showed.
The current account balance recorded a surplus of US$2.536 billion in the FY 09 against the surplus of $680 million of the previous fiscal due to larger current transfers of $10.226 billion, according to the central bank statistics, released on Thursday.
"Higher flow of inward remittances along with lower trade deficit has contributed to achieve a huge surplus position of the current account balance in FY09," he noted.
Bangladesh received remittances worth $9.689 billion during the last fiscal against $7.915 billion in the 2007-08 fiscal. The amount is 22.41 per cent higher than that of the previous fiscal.
The country's overall balance showed a surplus of $2.058 billion during the last fiscal against the surplus of $331million in the previous fiscal, mainly due to surplus in current account balance of $2.536 million, the central bank said.
“The large surplus in balance of payments will help minimize the country's risks, which is considered by the foreign investors," a BB senior official said.
The healthy position in the balance of payment also helps to maintain a stable exchange rate of the local currency against the US dollar in the foreign exchange market, the central bank officials said.
“The surplus balance of payments, if the present trend continues, will also act as a back-up support for the overall economy,” another BB official said.
However, the flow of net foreign direct investment (FDI) rose to $941 million in the last fiscal from $905 million of the previous fiscal, the BB officials confirmed.
On the other hand, the flow of portfolio investment recorded a deficit of $159 million in FY09 against $134 million one year back due to the ongoing global financial crisis, they added.
BBN/SS/SI/AD-28August09-1:41 am (BST)