The country saw its current-account deficit widen further in the first seven months of this fiscal mainly as trade and inward remittance both remained on a downturn.
Officials said the nation's current account counted a deficit of US$754 million during the July-January period of the financial year (FY) 2016-17 in a slide from $2.47 billion worth of surplus in the matching period of the last fiscal.
The deficit in current-account balance was $657 million a month ago, according to revised figures released by Bangladesh Bank (BB). It was estimated $793 million earlier.
"The current-account deficit balance may rise in the coming months if the existing higher trade deficit along with decreasing trend in inward remittance continues," a senior official of the BB told the FE Wednesday.
Meanwhile, the overall trade gap widened by more than 36 per cent or US$1.41 billion in the seven months to January of this FY following a higher growth in 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 trade gap may widen further in the coming months if the existing slower growth of export earnings compared to import payments continued," the central banker noted.
The overall import payments, including by 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 by export- processing zones, increased 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 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 in a healthy position despite a negative trend in 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.
"Higher financial-account surplus has contributed to keeping the overall BoP position almost stable," the central banker explained
The financial-account surplus jumped 148.25 per cent to $2.20 billion in the first seven months of this fiscal from $ 885 million in the same period of the FY 16.
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 the same period of the FY 16 while net FDI inflows rose by 8.57 per cent to $975 million from $898 million.
Talking to the FE, former Director-General of Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri said the authorities concerned ought to take effective measures immediately to boost export earnings along with revamping the remittance inflow for improving the current-account-balance position.
"The export earnings are not at a satisfactory level," the senior economist said, adding that the overall macroeconomic stability may be hampered if the negative trend in current-account-balance continued.
The overall export earnings fell 4.49 per cent to $2.73 billion in the month of February from the corresponding amount of $3.85 billion a year ago.
siddique.islam@gmail.com
Current account deficit widens
Siddique Islam | Published: March 09, 2017 00:00:00 | Updated: February 01, 2018 00:00:00
0
Share if you like