Bangladesh’s trade deficit dropped by US $ 6 billion to US $ 20 billion in the first 11 months of FY ’24 despite a loss in exports because of a large decrease in imports, according to central bank data.
But in May, the trade imbalance widened by US $ 1.52 billion. Nevertheless, in July through May of FY ’24, imports decreased by 12.6 per cent year over year, relieving some of the burden on the trade balance.
A few days ago, the National Board of Revenue rectified its export estimates that had been incorrectly displaying as inflated for the past few years, thus solving the riddle around the export statistics discrepancy.
Due to this, export data for the months of July through March have dropped dramatically by US $ 10 billion, indicating a decline in actual growth rather than the previously observed increase.
According to central bank data, the current account, which is the main account of a nation and is made up of imports, exports, and remittances, is US $ 5.98 billion in the negative for the July–May fiscal year of FY ’24. By the conclusion of the same period of the preceding fiscal year, the deficit exceeded US $ 12 billion.
Remittances increased by 10.1 per cent, but a fall in exports caused the current account deficit to worsen slightly. Even with the increase in remittances, the current account was unable to reach a surplus, primarily due to the large trade imbalance.
The financial account surplus at the end of May was US $ 2.08 billion, down US $ 226 million from April, according to central bank figures.
The balance of payments statement for July-April of FY ’24 revealed that the financial account swung to a surplus of US $ 2.2 billion, reversing from a historic deficit of US $ 9.25 billion a month earlier. Indeed, the financial account turned positive after two years of being negative.
For the past two years, the financial account, which is made up of a nation’s secondary sources of revenue such as foreign direct investment, short- and long-term loans, aid, and trade credit, has been negative, forcing the central bank to pay foreign creditors straight out of reserves.
From July to May of FY ’24, the total balance of payments deficit is US $ 5.88 billion.
Nonetheless, according to central bank data, gross foreign exchange reserves decreased to less than US $ 22 billion on June 30 from US $ 27 billion in December of previous year, suggesting that this gap may be a major contributing factor to reserve depletion.
