Dhaka, Bangladesh (BBN) - Bangladesh’s overall balance of payments (BoP) entered the negative territory after a decade because of a widening trade gap, lower growth of remittances and a deficit balance in the financial account, officials said.
"The country’s overall BoP showed a deficit of $635 million in fiscal year (FY) 2010-11 or FY11 against the surplus of $2.87 billion of the previous fiscal mainly due to deficit of $1.58 billion in financial account," a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
He also said the deficit in BoP started in November last and continued until June 2011.
The country's overall BoP registered a deficit of $281 million in FY01, according to the central bank statistics.
"The pressure on external sector may continue in the near future following widening trade gap and lower inflow of remittances," Director General of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri was quoted by the Financial Express (FE), a local newspaper, as saying on Saturday.
Mr. Mujeri, former chief economist of the central bank, also said the country's current account balance will improved if the flow of inward remittance and export earnings increase this fiscal.
The current account balance also decreased by over 73 percent to $995 million in FY11 from $3.724 billion of the previous fiscal, according to the central bank statistics.
The country's overall trade deficit widened more than 42 percent to $7.328 billion in FY11 as the import bill rose sharply due to price-hike of commodities in the global market.
In FY11, export earnings stood at $23.008 billion against the import payments of $30.336 billion, the BB data has showed. Trade deficit was $5.155 billion in the previous fiscal 2009-10.
"The BoP position could deteriorate in the coming months if import payment continues to grow at the current pace," the BB senior official said, adding that the overall deficit means higher capital outflow than inflow in the financial and capital accounts in the BoP.
BBN/SSR/AD-21Aug11-10:33 am (BST)