The country’s current account balance, a record of all monetary transactions with other countries around the world, has taken a harsh turn toward the negative after enjoying a surplus over the last few years. The latest Bangladesh Bank data shows, deficit in current account reached USD726 million in the July-November period of the current fiscal year (FY) 2016-17 against USD1.34 billion surplus in the corresponding months of the previous fiscal. The current account deficit is a matter of concern for the economy as it may create pressure on overall balance of payments (BoP).
The fall in current account balance is being attributed by experts to the fall in remittance, rise in import and a lower level of export earnings. MA Taslim, professor of Economics at Dhaka University, told this correspondent that expenditure in import is far higher than the export earnings. On the other hand, remittance inflow nosedived to a great extent. These two factors are primarily responsible for driving the current account into a deficit. “However, there is no need to worry about it yet. We have strong foreign reserves. But if the deficit lasts long it will have a negative impact on the economy,” he added. Zahid Hussain, a lead economist at the World Bank, also spoke in the same vein. He said, “The deficit is not alarming yet, but we must investigate why it suddenly slipped into the red. Recent statistics show that import of capital machineries have gone up. It may be a sign that investment is increasing. If it really does, it will certainly have a positive impact on the country’s economy and industrialization.” “But the authorities should be careful and check money laundering under the cover of importing capital machineries,” said Zahid Hussain warning that “money may be siphoned off through over invoicing or import of other goods in the name of capital machineries.”