Staff Reporter :
The current account balance and trade deficit in Bangladesh showed slight improvement in July, according to the latest balance of payments statement from the Bangladesh Bank.
The current account deficit decreased by 34.5 percent, falling to $193 million in July of the fiscal year 2024-25, compared to $295 million during the same month last year.
This easing of the current account deficit also contributed to a 9 percent reduction in the trade deficit, which declined to $1.4 billion from $1.6 billion in July of the previous year.
Experts attribute this improvement to a decrease in import activity, largely a result of the protests led by the Anti-discrimination Student Movement that ultimately led to the ousting of the Sheikh Hasina-led Awami League government.
Import expenditures recorded a 2.6 percent year-on-year decline, while exports experienced a slight uptick of 0.4 percent, helping to relieve pressure on the external balance.
The significant drop in import expenditure in July was primarily linked to the countrywide unrest, which caused businesses to suspend operations amid fears of prolonged instability.
Sector-specific analysis indicated that the largest reductions in letters of credit (LC) openings in July occurred in capital machinery and petroleum imports.
However, following the establishment of the interim government in August, there was a notable rebound in remittance inflows, providing the central bank with additional dollar liquidity in the foreign exchange market.
In August, Bangladesh received $2.2 billion in remittances, reflecting a 39 percent year-on-year increase, up from $1.6 billion in August 2023. This surge represented a 16 percent increase compared to July 2024, when remittance inflows totalled $1.91 billion.