Dhaka, Bangladesh (BBN)– Bangladesh’s current account deficit widened further in the seven months of the current fiscal year (FY) due to higher trade deficit along with falling trend of inward remittance, officials said.
The current account deficit reached at $754 million during the July-January period of the FY 2016-17 from $2.47 billion surplus in the same period of the last fiscal, according to the central bank’s latest statistics. It was $657 million a month ago.
Talking to BBN, a senior official of the Bangladesh Bank (BB) said the current account deficit balance may rise in the coming months if the existing higher trade deficit along with decreasing trend of inward remittance continues.
The overall trade gap widened by more than 36 per cent or US$1.41 billion in seven months to January of this FY following higher growth of import payments than export earnings.
The trade deficit rose to $5.28 billion during the period under review from $3.87 billion in the same period of the last fiscal, the BB data showed.
The overall import payments including export processing zones grew by 9.88 per cent to $ 24.90 billion in the first seven months of the FY 17 from $22.66 billion in the same period of the FY 16.
On the other hand, the overall export earnings including export processing zones increased by 4.42 per cent to $19.62 billion during the period under review from $18.79 billion in the same period of the FY 16.
Meanwhile, the flow of inward remittances dropped by 16.86 per cent to $7.07 billion in the first seven months of the FY 17 from $8.50 billion in the same period of the last fiscal.
The country’s overall balance of payments (BoP) is still a healthy position despite negative trend of current account balance, according to another BB official.
The BoP, however, came down to $ 2.18 billion during the period under review from $2.68 billion in the same of the FY 16.
“The higher financial account surplus has contributed to keep the overall BoP position almost stable,” the central banker explained
The financial account surplus jumped by 148.25 per cent to $2.20 billion in the first seven months of this fiscal from $ 885 million the same period of the FY 16.
The gross inflows of foreign direct investment (FDI) increased by 7.08 per cent to $ 1.71 billion during the period under review from $ 1.60 billion in same period of the FY 16 while net FDI inflows rose by 8.57 per cent to $975 million from $898 million.