Current account deficit narrows 58% in Jul-May of FY21
Export growth that went to a negative trajectory due to Covid-19 has returned to a moderate growth, thanks to a fast recovery in apparel exports
The deficit in the country's current account balance shrank significantly in the just concluded 2020-21 fiscal year, thanks to high remittance inflows and rising export earnings.
According to latest data released by the Bangladesh Bank, the deficit in the current account balance narrowed by 58% to $1.84 billion in the first 11 months of the last fiscal year.
The growth in export earnings that went to a negative trajectory following the outbreak of Covid-19 has returned to a moderate growth, thanks to a fast recovery in apparel exports.
Keep updated, follow The Business Standard's Google news channel
In the immediate past 2020-21 fiscal year, the country's export earnings from the apparel sector grew by 12.55% compared to the previous year to stand at $31.46 billion.
The Export Promotion Bureau (EPB) set the apparel exports target at $30.76 billion for FY21.
The annual growth in overall exports, however, was 15.10%. The country's exports raked in $38.75 billion in the just-concluded fiscal year.
In FY20, the export growth was negative 17%, according to the Bangladesh Bank.
The rebound of apparel demand in Europe and western markets after massive vaccination drives helped the apparel sector surpass its growth target last year.
Inflows of inward remittance, another component of foreign exchange market, were strong amid the pandemic situation and hit a record high in the last fiscal with over 36% year-on-year growth.
The figure jumped to $24.78 billion in FY21 from $18.2 billion a year ago, according to the Bangladesh Bank's latest statistics.
Even though consumption in the country is still down, rising commodity prices in the international market pushed the import expenditure up, widening the deficit in the trade balance.
The deficit in trade balance widened by 23% to $19.84 billion in the July-May of last fiscal year, according to the Bangladesh Bank's data.
The import expenditure registered a 17.28% growth in the first 11 months of last fiscal year, after bouncing back from negative 8.57% growth in the previous year.
