Lower remittance, export inflows weigh in
Current-account surplus falls fast
July-Oct amount shrink to $233m from $1.1b in Sept
JASIM UDDIN HAROON | Thursday, 7 December 2023
Bangladesh's current-account surplus falls fast as the amount shrank to US$233 million in July-October from $1.1 billion surplus in July-September period of this fiscal year, amid lower remittance and export earnings.
As the central bank of Bangladesh disclosed Wednesday the account figures, economists familiar with the development attributed the fast fall to slower growth in both remittances and export earnings.
Remittance inflow expanded by just 4.4 per cent during the period while the export receipts grew 3.6 per cent against its corresponding period a year earlier.
On the other hand, imports also dropped by more than 20.5 per cent year on year during the period.
Financial account, another key component of the Balance of Payments (BoP), also remained in large deficits during the period under review. This value is almost the same as the last quarter of this fiscal year (July-September).
However, the financial account was surplus at $1.3 billion during the same period a year earlier, the Bangladesh Bank data showed.
The country posted a small current-account surplus in October, by default, though, as imports were compressed, economists say.
"There is no indication of improvement in external imbalance in the latest BoP data," says Dr Zahid Hussain, a former economist of the World Bank,
The deficit in "other short-term loan" category is still a big amount and should be worried about.
The other short term means the net repayment is widening vis-a-vis its inflows.
Dr. Hussain feels that the net inflow in short-term loans is a matter of concern as the inflows are decreasing daily.
However, the overall balance gap widened as well.
The data show that the gap stood at $3.8 billion during the period against the July-September period of $2.9 billion.
The trade-credit deficit was recorded at $3.7 billion during the period. This was almost the same a month back in the July-September period.
However, the trade imbalance has widened even though there are import compressions.
The trade balance was recorded at a $3.8 billion in deficit in the period under review over the July-September period of this fiscal year. The July-September period was deficit at $1.8 billion.