Current-account surplus further up, spurs economic activity

Bangladesh's current-account surplus has increased, with the August figure having nearly doubled to US$500 million over the previous month's, giving a much-needed shot in the arm economic activity.

Official statistics show the CAS upswing is powered by strong remittance inflows and robust export performances.

Current-account surplus means the country receives more payments for its export of goods and services exports than it pays for its imports and incomes paid to foreigners. The surplus in such two-way transactions indicates the country is a net lender to the rest of the world.

This account surplus rose to US$483 million in August 2025 in a leap from $246 million in July, accounting for a monthly growth of over 96 per cent, according to latest Bangladesh Bank statistics released Thursday.

During the period, exports grew nearly 11 per cent and imports also expanded by just over 9.0 per cent, the data showed.

During the period, knit apparel exports rose by 8.7 per cent to $3.94 billion while woven garments climbed nearly 10 per cent to $3.17 billion.

And remittance earnings during the period ballooned to $4.99 billion or up by 18.4 per cent over the corresponding period.

Financial account, another macroeconomic component of the balance of payments (BoP), however, recorded deficit at $528 million compared to a much higher amount of $1.17 billion a year earlier.

Capital account, however, posted a small surplus at $9.0 million, down by more than 86 per cent from its corresponding period a year earlier.

Economists see the current-account surplus as a good sign despite the fact that import is now picking up to meet domestic needs for consumption and production.

They are also optimistic that investment might rebound as the import of capital machinery is increasing.

"External balance is on track. The current-account surplus has increased despite pickup in import growth thanks to persistently strong remittances," says Dr Zahid Hussain, an independent economist of Bangladesh.

He notes that capital-goods imports have rebounded for a second month in a row this fiscal year.

During the period, the capital-machinery imports increased by more than 41 per cent to $750 million. "This indicates investment depression may have bottomed out."

He also mentions that the financial-account deficit declined relative to July with pickup in MLT disbursements and the narrowing of trade-credit outflows. Overall BOP deficit has therefore shrunk to almost near balance.

In the meantime, the overall balance of BoP, however, recorded a deficit of $53 million that is significantly lower than the $1.43 billion during the same period a year before.

With the improvement in the country's external position, the official foreign-exchange reserves climbed to $26.17 billion during the review period, according to the central bank reckonings.

jasimharoon@yahoo.com