Bangladesh's current account balance improved sharply in the 2024-25 fiscal year, supported by strong remittance inflows and export growth, although a persistent trade deficit continued to weigh on the external position.
The current account balance rose by nearly 98 per cent year-on-year, driven primarily by a 38.1 per cent increase in net workers' remittances and a 17.1 per cent rise in export earnings on a free-on-board (f.o.b.) basis, according to the central bank official data released last week.
Despite the improvement, the current account remained marginally in deficit at Tk 15.1 billion in the year under review.
"The modest narrowing was largely due to export growth outpacing the rise in imports, indicating some easing of external pressures," said a central banker wishing not to be named.
Export earnings climbed to Tk 5.31 trillion during the fiscal year, continuing a long-term upward trend despite periodic fluctuations.
Imports also increased significantly to Tk 7.78 trillion, underscoring the country's growing reliance on foreign goods and industrial inputs for its industrial consumption.
The inflow of secondary income, largely driven by remittances, reached Tk 3.75 trillion, providing a key buffer against external imbalances.
However, this was offset by substantial outflows from trade, services (Tk 688.1 billion), and primary income (Tk 609.8 billion), keeping the current account under pressure.
Historical trends show that Bangladesh's trade deficit has widened significantly since the mid-2010s, peaking between FY21 and FY23, when the country also recorded elevated current account deficits.
Economists say while both exports and imports have expanded steadily, import growth has consistently outpaced export performance, contributing to a structurally high trade deficit.
They say the latest data presents a mixed picture.
While export resilience and remittance growth are supporting external stability, the structure of Bangladesh's trade - characterised by strong import demand - continues to pose risks.
"The improvement is encouraging but fragile," said Dr Zahid Hussain, an independent economist.
"Without diversification of exports and better management of import demand, pressure on the external account will persist."
The data highlighted Bangladesh's deepening integration into global trade, with both export and import volumes rising steadily, he said.
But there were many challenges for maintaining such current account balance this year on the grounds of the Iran-US-Israel war, he added.
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