Bangladesh’s current account deficit narrowed significantly in the first nine months of the 2024-25 financial year, mainly due to a robust increase in remittance inflows, according to the latest data released by Bangladesh Bank.
Between July and March, the deficit dropped to $659 million, marking a sharp improvement from the $4.4 billion deficit recorded in the same period a year earlier.
The current account is a key measure of a country’s economic transactions with the rest of the world, covering trade in goods and services, earnings from investments, and transfer payments such as remittances.
The primary driver behind this improvement was a strong rise in remittance inflows, which bolstered the country’s secondary income.
During the period under review, secondary income surged to $22.13 billion, compared with $17.41 billion in the corresponding period of FY24.
Of this, a significant $21.78 billion came from remittances sent home by Bangladeshi workers abroad.
Despite the improvement in secondary income, Bangladesh continued to face a deficit in its primary income account, which includes payments made to foreign entities for interest, dividends, and salaries.
In July–March, the deficit in this account stood at $3.4 billion. Total income paid abroad amounted to $4 billion, while earnings from abroad were limited to $515 million.
Bangladesh’s trade deficit also declined marginally in the same period.
The trade gap fell to $15.43 billion, slightly down from $15.75 billion in the previous year. The narrowing of the trade deficit was supported by a 9.5 per cent rise in export earnings, which reached $33.8 billion, up from $30.94 billion.
Imports also increased, though at a slower pace, growing by 5.6 per cent to $49.3 billion from $46.7 billion a year earlier.
The financial account, which reflects net foreign investments and loan inflows, posted a higher surplus of $1.3 billion, up from $901 million in the same period of FY24.
The government borrowed $4.47 billion in foreign loans, lower than $5.52 billion in the previous year, while repayments rose to $2.06 billion from $1.5 billion.
Meanwhile, the trade in services deficit widened to $3.88 billion from $2.84 billion, as spending on international travel, transport, and business services increased.
As of May 4, Bangladesh’s foreign exchange reserves, calculated under IMF guidelines, stood at $21.97 billion.
