Surplus fund comes as economic relief

Bangladesh registered a current account balance surplus of over $2.8 billion in the first nine months (July-March) of the current fiscal (2012-13).

Published : 17 May 2013, 00:35 AM
Updated : 17 May 2013, 01:32 AM

This is seen as a comfortable zone for the country with no need to borrow money for regular transactions.

In case of debts, a government has to borrow money (from banks, private sectors or abroad) and repay.

During the same period last year there was a debt of $120 million. The account includes regular export-import and other earnings and expenditures.

Bangladesh Institute of Development Studies (BIDS) Research Director Zaid Bakht put the surplus to be an outcome of a good inflow of remittance and reduced trade deficit.

“It is mainly due to the positive inflow of remittance. It seems, the flow will sustain for the remaining three months (of the current fiscal).”

The apex bank’s balance sheet shows a $4.86 billion deficit in trading of goods in the first nine months (of the current fiscal). During the same period last year, the deficit was $6.75 billion.

This year, the deficit is almost 28 percent lower.

Zaid Bakht said, besides savings from imports, export expenditures came down too.

According to the balance sheet (FOB-based), export revenue gained 9.5 percent in the first nine months of the current fiscal compared to the figures in the last fiscal.

During this time (current year), over $19.35 billion was earned as export revenues and $24.22 billion as import expenditure – revenue gained by 9 percent and expenditures reduced by one percent compared to the same period last fiscal year.

However, the deficit in the services sector increased from over $2.19 billion in the first nine months of the previous fiscal to $2.34 billion in the first nine months of the current fiscal year.

The services sector deficit is calculated on the basis of insurance, travel and other related fields.

The apex bank said of over $11.02 billion coming in as remittance from July-March in the 2012-13 fiscal. Last year, during the same period, the amount was over $9.44 billion.

Calculating all, there is a $1.57 billion surplus in these nine months. Last year (in the nine months), the excess amounted to $779 million.
Upon analysis, it shows that an increase in foreign aid and investment made a positive impact on the economic health of the government.
During these nine months in the current fiscal, the country received $1.05 billion in foreign direct investment (FDI). During the same nine months in the previous fiscal, the amount was $198 million.
Simultaneously, investment (portfolio investment) in the capital market amounted to $180 million – which was $198 million in the last fiscal.
Overall, the surplus in the current fiscal amounted to over $3.94 billion in the first nine months of the current fiscal. In the last fiscal, there was a debt of $419 million.