Bangladesh's BoP deficit widens, worries economists

Bangladesh’s balance of payments (BoP) deficit has widened.

According to the central bank, the deficit rose to $ 1.32 billion in the first five months of the current fiscal year that began on July 1 last year, from $ 1.13 billion over the same period of the previous fiscal.

Bangladesh registered a surplus in BoP in the first two months of the FY but it went into a negative trajectory in September.

Bangladesh Bank Governor Atiur Rahman, however, said there was nothing to be worried about the increase in the deficit.

“There is no problem in this, as we’ve (foreign exchange) reserves of $ 22 billion,” he said.

The governor said the reserves could foot the country’s import bills fir seven months.

Economists, however, fear that the current political unrest might hit the economy.

“Our economy bounced back in 2014 after the political violence in 2013. Almost all indictors including inflation, remittance, export, import and (foreign exchange) reserves were positive,” said Rahman.

But, he said, the economy might face challenges similar to those of 2013, if the political unrest that hit Bangladesh at the beginning of the New Year continued.

The Bangladesh Institute of Development Studies (BIDS) Research Director Zaid Bakht echoed Rahman’s views.

He told bdnews24.com that Bangladesh was making ‘good’ progresses in economic and social sectors.

“The over six percent GDP growth year after year has been a good achievement. Work on several big projects, including Padma Bridge and Metrorail, started. But the political unrest has put all these at risk,” he added.

According to the central bank, Bangladesh was maintaining surplus in BoP for last two FYs -- $ 2.39 billion in 2012-13 FY and $ 1.55 billion in 2013-14 FY.

The country saw a deficit of $ 440 million in 2011-12 FY.