Overall balance of payments records surplus in July

FE Team | Published: November 11, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The country's overall balance of payments recorded a surplus despite a deficit in current account balance in July last, the first month of the current fiscal.
The overall balance showed a surplus of $161 million in July, 2007 against the deficit of $64 million in July, 2006 due mainly to surplus in financial account at $242 million, the Bangladesh Bank (BB) said in its Major Economic Indicators: Monthly Update-October 2007.
Although there was a robust growth of inward remittances the current account balance showed a deficit of US$132 million during the period, official sources said.
According to the central bank statistics, the overall trade deficit was estimated at $502 million in July due to higher import payment. The deficit was $90 million in July, 2006.
In July last, the country's export earning was worth $ 902.33 million, down by 21.08 per cent over that of the same period of the previous year.
The export earning also fell short by 32.72 per cent of the strategic target to $1341.25 million, according to the state-run Export Promotion Bureau (EPB) figures.
"Imbalance in the current account could be higher, but the higher inflow of inward remittances has helped keep it at a tolerable level," a BB senior official told the FE.
He also said the current account balance would turn into surplus if the overall export performance was improved.
"Despite larger current transfer of $612 million, current account balance recorded a deficit of $132 million in July, 2007 against the surplus of $159 million in July, 2006 due to larger deficit in trade balance, service and income," said the BB monthly update.
The deficit in services increased to $124 million in the same period from $111million in the corresponding period of the previous fiscal.
The flow of net foreign direct investment (FDI) stood at $66 million in the period against $69 million in the same period of the previous fiscal. The portfolio investment was recorded in the month at $33 million against none in the corresponding period of the previous fiscal.
The central bank officials, however, are hopeful of a rise in the flow of FDI and foreign assistance in the near future due to the ongoing reforms programme taken up by the caretaker government.
"The flow of FDI and foreign assistance may increase shortly as a result of the government's ongoing reforms measures," a BB official noted.
He said the reforms measures will also help maintain overall surplus in the balance of payments in the near future.
However, the net receipts of foreign aid dropped to $10.03 million during the July- August period of the current fiscal from $42.25 million of the same period of the previous fiscal, the BB's data showed.