Abu Sazzad :
Country’s current account balance marked a historic deficit at $1650 million in the last fiscal 2014-15 against a surplus of $1400 million in the FY 2013-14 due to higher import payments against comparatively lower export receipts.
The current account balance is the gap between components such as export receipts and net earnings in services including remittances and import payments and profit repatriation by multinationals and local people.
The export earning was $31,198.45 million in FY 2014-15 as against $30,186.62 million in FY 2013-14. The export was marginally grown by 3.35 per cent. On the other hand, import was $40,685 million in FY 2014-15 which was $36,571 million in the FY 2013-14. The import was extensively grown by 11.25 per cent, according to the data of Bangladesh Bank.
The trade deficit hit its all-time high at $9487 million in the FY15 against $6385 million in the FY14 which played a major role in widening the deficit in the current account balance.
Despite impressive growth of remittance, the current account balance declines recently due to higher payments imports costs in the last fiscal, said BB Executive Director M Mahfuzur Rahman. Country’s reserve stands at record $26,233.46 million recently which is enough for meeting seven months import payment.
Former interim government adviser and economist, Mirza Azizul Islam said, the slower growth in export earnings was the main cause of the large deficit in the current account balance. A country needs foreign loans if its current account balance becomes deficit, explained he. For this reason, the surplus balance of the current account is considered positive for any country, he explained.
The external liabilities of the government are not much high, so the deficit in the current account does not put adverse impact on the macroeconomic situation right now, he said. ‘But, the macroeconomic situation will deteriorate if the country maintains the large deficit in the current account for long,’ Mirza Aziz said.
He pointed that the government should take immediate measures to increase the export earnings by creating new markets in different countries.
Economist Mamun-ur-Rashid said, the deficit current account balance might put an adverse impact on the country’s macroeconomic situation in the coming months when the letters of credit would be opened to import in full swing.
The cancellation of garments order followed by political deadlock in the first half of current year was one of the major reasons for surplus current account balance. But right now, the political situation in the country has improved and the importers have started to import industrial raw materials, capital machineries and other accessories, said the economist. The imports might increase further for the construction of Padma Bridge, the country’s largest infrastructural project, he also added.
Country’s current account balance marked a historic deficit at $1650 million in the last fiscal 2014-15 against a surplus of $1400 million in the FY 2013-14 due to higher import payments against comparatively lower export receipts.
The current account balance is the gap between components such as export receipts and net earnings in services including remittances and import payments and profit repatriation by multinationals and local people.
The export earning was $31,198.45 million in FY 2014-15 as against $30,186.62 million in FY 2013-14. The export was marginally grown by 3.35 per cent. On the other hand, import was $40,685 million in FY 2014-15 which was $36,571 million in the FY 2013-14. The import was extensively grown by 11.25 per cent, according to the data of Bangladesh Bank.
The trade deficit hit its all-time high at $9487 million in the FY15 against $6385 million in the FY14 which played a major role in widening the deficit in the current account balance.
Despite impressive growth of remittance, the current account balance declines recently due to higher payments imports costs in the last fiscal, said BB Executive Director M Mahfuzur Rahman. Country’s reserve stands at record $26,233.46 million recently which is enough for meeting seven months import payment.
Former interim government adviser and economist, Mirza Azizul Islam said, the slower growth in export earnings was the main cause of the large deficit in the current account balance. A country needs foreign loans if its current account balance becomes deficit, explained he. For this reason, the surplus balance of the current account is considered positive for any country, he explained.
The external liabilities of the government are not much high, so the deficit in the current account does not put adverse impact on the macroeconomic situation right now, he said. ‘But, the macroeconomic situation will deteriorate if the country maintains the large deficit in the current account for long,’ Mirza Aziz said.
He pointed that the government should take immediate measures to increase the export earnings by creating new markets in different countries.
Economist Mamun-ur-Rashid said, the deficit current account balance might put an adverse impact on the country’s macroeconomic situation in the coming months when the letters of credit would be opened to import in full swing.
The cancellation of garments order followed by political deadlock in the first half of current year was one of the major reasons for surplus current account balance. But right now, the political situation in the country has improved and the importers have started to import industrial raw materials, capital machineries and other accessories, said the economist. The imports might increase further for the construction of Padma Bridge, the country’s largest infrastructural project, he also added.
