Dhaka, Bangladesh (BBN)– Pressure on Bangladesh’s overall balance of payments (BoP) has increased in recent months due to widening trade gap, lower growth of inward remittance and deficit balance in the financial account.

The BoP entered the negative territory in November last after a long time and the deficit widened further in January this year, officials said.

“Due to deficit of US$ 1.174 billion in financial account the overall balance showed a deficit of $711 million during July-January period of the current fiscal against the surplus of $2.138 billion in the corresponding period of the last fiscal,” a senior official of the Bangladesh Bank (BB), the country’s central bank, said.

He also said the existing BoP position may continue up to the third quarter of current fiscal. “But it may improve slightly by the end of this fiscal after the expected good harvest of Boro and wheat,” the BB official noted.

The country’s overall trade balance, on the merchandise account, recorded a deficit of $4.273 billion during July-January period as compared to that of $2.975 billion of the corresponding period of the previous fiscal.

During the period under review, export earnings stood at $12.214 billion against the import payments of $16.487 billion, according to the central bank statistics.

The country received $7.495 billion as remittances during the July-February period of current fiscal (2010-11), registering a 2.49 per cent growth over the corresponding period of the previous fiscal.

“We hope that the flow of inward remittance will cross $1.0 billion in the month of March,” another BB official said, adding that the higher inflow of remittance would help improve the current account position.

The current account balance also declined by more than 79 percent to $428 million during July-January period under review from $2.084 billion of the corresponding period of previous fiscal, the BB data showed.

However, the flow of net foreign direct investment (FDI) rose to $458 million during the period against $437 million of the corresponding period of the previous fiscal, the central bank officials said.

The portfolio investment witnessed a rise to $40 million in the period from a deficit of $50 million during of the corresponding period of the last fiscal.

BBN/SSR/AD-04Apr11-1:57 pm (BST)