The turnaround has been attributed to stronger remittance
inflows, foreign aid, a flexible exchange rate, and tighter fiscal measures.
The overall balance of payments posted a surplus of US$3.3
billion at the end of FY25, bouncing back from a US$4.3 billion deficit a year
ago.
The country recorded deficits of US$8.22 billion in FY23 and
US$5.38 billion in FY22. The last time the external balance was in surplus was
in FY21, when it stood at US$9.27 billion.
The balance of payments tracks the difference between what
the country earns from the rest of the world and what it spends abroad.
In its Monetary Policy Statement (MPS) for the July-December
period of FY26, the central bank said the external sector’s recovery was evident
in the return to a surplus, the rise in foreign exchange reserves, and a more
stable exchange rate.
It also said the main driver of this improvement was the
current account balance, which returned to surplus after a large deficit. The
financial account also posted a surplus, though to a lesser extent than in
previous years.
The current account recorded a US$1 billion surplus in FY25,
which was US$6.6 billion in deficit in FY24. Meanwhile, the financial account
ended the just-concluded year with a US$3.2 billion surplus.
The recovery was powered by higher remittance inflows and
strong export earnings, while sluggish imports also played a role. The current
account swung to a surplus of US$981 million, a remarkable improvement on the
previous year’s shortfall.
“The current account turned positive because remittance
inflows have been strong. That’s one aspect. The second aspect is the financial
account, which previously had a large deficit,” Mustafizur Rahman,
distinguished fellow at local think tank Centre for Policy Dialogue (CPD), told
The Daily Star.
He said the financial account benefited from loans and
assistance from the International Monetary Fund, World Bank and Asian
Development Bank.
“With both the financial account and the current account now
in surplus, the overall balance of payments has turned positive,” he said.
“This is certainly a positive development.”
“As a
result, two things have happened. T exchange rate has become more stable, and
if there is any pressure on the exchange rate, the Bangladesh Bank has also
created a half-billion-dollar fund to intervene in the market, when necessary,”
said the economist.
“So overall, this is definitely a good development for the
economy, at least in terms of the external sector, where external balances have
been stabilized. As a result, the exchange rate is stabilizing, the forex
reserves are increasing because of this surplus, and the previous import
restrictions are now being eased.”
The central bank stated that steady global demand and a
market-driven exchange rate helped lift exports by 8.6% to US$48.3 billion in
FY25, up from US$44.5 billion a year earlier.
Imports, which had dropped by 11.1% in FY24, began
recovering in FY25 as the foreign exchange market became more liquid.
Total imports grew by 2.4%, led by consumer goods and raw
materials for the garment sector. However, the import of capital machinery
remained weak, reflecting a lack of investment appetite, it said.
Rahman pointed out that the private sector had not yet
resumed capital machinery imports in any meaningful way. However, he said
restrictions were no longer necessary.
“If the macro economy remains stable, we may then see an
increase in capital machinery imports by the private sector, and that could put
some pressure on overall imports,” he said.
“Now that our reserves are in a good position,” he added,
“if import pressure increases, the economy is now in a position to handle it.”
“But we need to stay cautious, because demand might rise in
the future.”
Rahman also observed that while the financial account’s
surplus is a positive sign, it is largely debt-driven.
“The surplus is coming from the loans we are receiving,” he
said. “Against this, we have to provide debt servicing. So, in that sense, the
structure is also positive. It’s not just a surplus driven by a debt-creating
financial account.”
