Bangladesh鈥檚 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鈥檚 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鈥檚 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鈥揗arch, 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鈥檚 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鈥檚 foreign exchange reserves, calculated under IMF guidelines, stood at $21.97 billion.