Mohammad Badrul Ahsan :
Lower export earnings and remittance inflow against higher import payment coupled with profit repatriation by foreign companies have further widened the country’s current account deficit to $754 million in the July-January period of the financial year, central bank data shows.
Till December, the current account deficit in the first six months of the current FY16 was $657 million. The deficit, however, rose further to $754 million by the end of January.
The current account balance of the country was a surplus of $2.47 billion in the same period of the FY 2015-16.
A Bangladesh Bank (BB) official preferring anonymity said a large deficit in current account balance would put an adverse impact on the country’s macroeconomic situation in the coming months as the import payments increased significantly in recent months.
Mirza Azizul Islam, former advisor to the caretaker government told The New Nation that a slower growth in export earnings was the main cause of the large deficit in the Current Account balance.
The negative growth in the inward remittance also put an adverse impact on the current account balance, he added.
External liabilities of the government are not much high, so the deficit in the current account would not put any 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, however, urged the government to take immediate measures to increase the export earnings
and inward remittances. A country needs to take foreign loans if its current account balance registers a deficit, the BB official said. So, surplus balance of the current account is considered positive for any country, he said.
The BB data showed that the country’s trade deficit increased by 36.34 per cent to $5.28 billion in the first seven months of FY17 compared with that of $3.87 billion in the corresponding period of FY16.
The BB data, however, showed that the net foreign direct investment increased by 8.57 per cent to $975 million in the July-January period of FY17 from that of $898 million in the same period of FY16.
In the first seven months of the FY17, medium- and long-term foreign loans, however, decreased to $1.24 billion from $1.50 billion during the same period a financial year ago.
The financial account in the country’s balance of payments posted a surplus of $2.19 billion in the July-January period of FY17 from a surplus of $885 million during the same period of FY16.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
The BB data, however, showed that the country’s overall balance dropped to $2.18 billion in the first seven months of FY17 against $2.67 billion in the same period of FY16 due to a large deficit in the current account balance.
Lower export earnings and remittance inflow against higher import payment coupled with profit repatriation by foreign companies have further widened the country’s current account deficit to $754 million in the July-January period of the financial year, central bank data shows.
Till December, the current account deficit in the first six months of the current FY16 was $657 million. The deficit, however, rose further to $754 million by the end of January.
The current account balance of the country was a surplus of $2.47 billion in the same period of the FY 2015-16.
A Bangladesh Bank (BB) official preferring anonymity said a large deficit in current account balance would put an adverse impact on the country’s macroeconomic situation in the coming months as the import payments increased significantly in recent months.
Mirza Azizul Islam, former advisor to the caretaker government told The New Nation that a slower growth in export earnings was the main cause of the large deficit in the Current Account balance.
The negative growth in the inward remittance also put an adverse impact on the current account balance, he added.
External liabilities of the government are not much high, so the deficit in the current account would not put any 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, however, urged the government to take immediate measures to increase the export earnings
and inward remittances. A country needs to take foreign loans if its current account balance registers a deficit, the BB official said. So, surplus balance of the current account is considered positive for any country, he said.
The BB data showed that the country’s trade deficit increased by 36.34 per cent to $5.28 billion in the first seven months of FY17 compared with that of $3.87 billion in the corresponding period of FY16.
The BB data, however, showed that the net foreign direct investment increased by 8.57 per cent to $975 million in the July-January period of FY17 from that of $898 million in the same period of FY16.
In the first seven months of the FY17, medium- and long-term foreign loans, however, decreased to $1.24 billion from $1.50 billion during the same period a financial year ago.
The financial account in the country’s balance of payments posted a surplus of $2.19 billion in the July-January period of FY17 from a surplus of $885 million during the same period of FY16.
The financial account includes foreign direct investment, portfolio investment, and medium- and long-term loans.
The BB data, however, showed that the country’s overall balance dropped to $2.18 billion in the first seven months of FY17 against $2.67 billion in the same period of FY16 due to a large deficit in the current account balance.
