Bangladesh saw its balance of payments (BoP) deficit narrow in the opening month of the fiscal year 2025-26 as two props helped partly offset a sharp deterioration in the country's financial account.
Last official statistics show a current-account surplus and robust remittance inflows helped out in the July positive turn.
According to Bangladesh Bank data released Monday, the country recorded an overall BoP deficit of US$545 million in July, down from $693 million in deficit a year earlier.
The current-account balance swung to a $245-million surplus in July, reversing a $181-million deficit in the same month of 2024.
Economists attribute the turnaround to buoyant export earnings and a surge in remittance inflows.
Exports rose 27.1 per cent year on year to $4.43 billion, driven by a 24.7-percent increase in ready-made garment (RMG) shipments to $3.96 billion.
In another development for the national economy, imports also expanded, though at a slower pace of 19.9 per cent, totaling $5.93 billion in the period under review.
Meanwhile, worker remittances jumped nearly 30 per cent to $2.48 billion, boosting secondary income and easing pressure on the current account.
The economists say the strong inflows reflected both seasonal factors and a continued preference for formal banking channels following tighter anti-hundi enforcement and incentives.
The financial account, however, exposed a weak spot, posting a $718- million deficit in July compared to a surplus of $263 million a year earlier.
The deterioration was driven by net outflows in "other investments", including trade credits and short-term borrowings, as well as higher repayments of external loans.
While foreign direct investment (FDI) doubled to $104 million, it remained modest relative to the country's financing needs.
Portfolio-investment flows also remained sluggish amid global uncertainty and domestic concerns over governance in the financial sector.
Dr Zahid Hussain, an independent economist of Bangladesh, says the data painted a mixed picture: external receipts are strengthening, but persistent financial account stress - stemming from capital outflows, debt servicing.
He says the current account remained surplus despite the fact that the import rose by nearly 20 per cent during the period under review.
Dr Hussian, who worked as lead economist of the Dhaka office of the World Bank, notes that capital-goods imports are on the rise. "This is a good sign for the economy."
The imports of capital goods during the month increased over 40 per cent to $1.2 billion. "There was no spike in the prices of capital goods on the international market in July so we are hoping that a turnaround might happen in investment," the economist says.
jasimharoon@yahoo.com