Experts say surplus in current and financial accounts is insufficient for full balance recovery
Published : 05 Feb 2025, 02:14 AM
Bangladesh’s trade deficit has narrowed further in the first six months of the current fiscal year, driven by a positive trend in exports.
According to Bangladesh Banks’s latest data, the country exported goods worth $22.32 billion between July and December of FY 2024-25, marking an 11 percent rise compared with the same period last year.
In the first half of FY 2023-24, exports stood at $20.18 billion.
Imports in this period reached $32.08 billion, marking a 3.5 percent rise compared with the previous year’s $30.99 billion.
As a result, the overall trade deficit narrowed to $9.76 billion over the six months, down from $10.87 billion in the same period last fiscal year.
Key indicators, including the current account balance, financial account, remittances, and trade credit, have also shown improvement.
However, economists say the overall balance remains under pressure due to weaknesses in indicators such as errors and omissions.
Zahid Hussain, former lead economist at the World Bank’s Dhaka office, told bdnews24.com: “Exports were always happening, but the dollar inflow was lower than expected.
“This year, the deficit in current account balance has reduced, indicating that export earnings have increased.”
The central bank data shows that the trade credit deficit dropped to $145 million in the first six months of the current fiscal year, down sharply from $2.02 billion in the same period last year.
The current account balance has posted a $33 million surplus, compared with a $3.47 billion deficit in the first half of FY 2023-24.
The financial account recorded $1.37 billion, up from $604 million in the same period last year.
Despite these improvements, the overall balance of payments remains in deficit, standing at $394 million, though much lower than the $3.45 billion deficit in the previous year.
Bangladesh Bank data indicates that errors and omissions accounted for a $2.03 billion deficit in the first six months of the current fiscal year, a sharp increase from $751 million in the same period last year.
“This indicator suggests that dollars have been spent, but their exact usage remains unaccounted for, the economist said.
“A total of $2 billion has left the country, but there is no clarity on where it has gone or for what purpose. This rise in undocumented outflows is concerning.”
"There are signs of money laundering in this. Bangladesh Bank should expain the matter," he concluded.