Bangladesh’s current account deficit reaches highest level of history

DHAKA, June 20 (NsNewsWire) — Bangladesh’s current account balance that has been consistently in deficit in about four years has reached the highest level of history in the wake of soaring imports bills, reports Xinhua.
The country’s current account deficit in the first 10 months of fiscal year 2017-18 (July 2017-June 2018) amounted to 8.51 billion U.S. dollars, up 373 percent from a year ago.
The deficit in the current account stood at 8,510 million U.S. dollars in the first 10 months of the fiscal, in contrast with a deficit of 1,797 million U.S. dollars in the same period a year ago, showed the central bank data posted on its website recently.
A Bangladesh Bank (BB ) official who did not like to be named told Xinhua Tuesday, the July-April amount of deficit is the highest in the country’s history meaning Bangladesh’s economy absorbed more than that it produced in the first 10 months of the outgoing fiscal year.
He said Bangladesh’s trade deficit swelled by over 87 percent year-on-year to 15.33 billion U.S. dollars during the July to April period of the current 2017-18 fiscal year due largely to steep rise in construction-related import bills for some quite big infrastructure projects like the 6.15-km Padma bridge worth billions of U.S. dollars.
Apart from this, he said rising price of oil on the world market and importing a significant amount of rice in an effort to replenish reserves and rein in prices of the staple in the wake of the last year’s floods have also led to the skyrocketing imports.
In July-April period of the current 2017-18 fiscal year, Bangladesh import payment was 45.35 billion dollars, up 25 percent, while earnings from exports stood at 30.01 billion dollars, up about 7 percent, during the same period, showed the BB data.
The BB official said both current account balance and overall balance of payments have showed negative trend as growth in export earnings and inflow of remittances could not keep pace with imports.
He said remittances have helped cushion to some extent the impact of the trade deficit.
BB data showed inflow of inward remittances surged about 18 percent year on year to 12,088 million U.S. dollars in July-April period of the current 2017-18 fiscal year.
But remittances from some 10 million Bangladeshis, living and working abroad, as always could not keep the overall balance of payments in surplus.
The overall balance of payment swung into a deficit of 1.04 billion U.S. dollars in the first 10 months of  2017-18 fiscal year, the BB data showed.
Officials said the increasing capital goods imports due to the infrastructure boom that have largely contributed in keeping the country’s current account surplus to a deficit  since September, 2014 is expected to further swell and undermine Taka, the currency of Bangladesh.   Enditem