Dhaka, Bangladesh (BBN)- The country’s overall balance of payments (BoP) continued to maintain a surplus position during the first four months of this fiscal mainly due to higher surplus in current account balance, officials said on Saturday.
The current account balance recorded a larger surplus during the July-October period of the fiscal 2009-10 (FY10) because of lower trade deficit and robust growth of inward remittances.
"We expect that the existing trend of current account balance along with the overall balance of payments will continue up to the second quarters of this fiscal,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
He also said the country's overall import payments may pick up in the third quarters of this fiscal due to increasing trend of prices of major commodities in the international markets.
The overall trade deficit fell by $790 million to $1.539 billion in the period under review from $2.329 billion in the same period of the previous fiscal, mainly due to the decreased prices of major importable commodities including fuel oil in the global market.
During the period, export earnings stood at $4.905 billion against the import payments of $6.444 billion, according to the central bank statistics.
Meanwhile, Bangladesh expatriates sent home a record $5.535 billion in the first-half of the current fiscal, marking a 22.89 per cent growth over the same period of the previous fiscal period.
"Due to larger current account transfers of $3.807 billion the current account balance recorded a surplus of $1.258 billion during July-October, 2009 against the deficit of $325 million during July-October, 2008," the BB said in its Major Economic Indicators: Monthly Update-December, 2009.
The overall balance also showed a larger surplus of $1.194 billion during the period under review against the surplus of $277 million during July-October period of the previous fiscal, according to the Monthly Update.
“The large surplus in overall balance of payments will help minimize the country's risks, which is considered by the foreign investors," another BB official said, adding that the healthy position in the balance of payment, if the existing trend continues, will act as a back-up support for the overall economy. “But it is fueled in increasing inflationary pressure on the economy,” he noted.
However, the flow of net foreign direct investment (FDI) came down to $207 million in the period from $402 million in the same period of the previous fiscal, the BB officials confirmed.
The flow of portfolio investment has also recorded a deficit of $29 million during the period under review due to the global financial meltdown, they added.
BBN/SS/SI/AD-09January10-7:22 pm (BST)