Although import expenses have risen in the country, export earnings have failed to keep pace.

Consequently, the trade deficit expanded to $3.82 billion in the first two months, covering July and August, of the current financial year 2027 (FY27).

Over the same period, deficits in the financial account and overall balance of payments also widened. However, a surge in remittances helped keep the current account in surplus.

This foreign transaction picture was highlighted in Bangladesh Bank's latest Balance of Payments (BoP) report, which was released by the central bank on Tuesday, October 6.

According to the report, import expenditure during the July–August period totaled $12.2 billion, while export earnings reached $8.38 billion.

As a result, import costs exceeded export revenues by $3.82 billion over these two months.

During the same period in the previous fiscal year, the trade deficit stood at $2.962 billion, meaning the deficit widened by $858 million year-on-year.

The Balance of Payments (BoP) serves as one of the essential indicators utilized to measure the inflow, outflow, and overall condition of international transactions within a country.

Bangladesh Bank's latest report shows that the overall balance deficit reached $694 million in the first two months of the current fiscal year.

By contrast, the deficit for the comparable period in fiscal year 2026 amounted to only $53 million, marking a sharp increase compared with the previous year.

The financial account reflects changes in ownership of international assets and foreign capital flows.

A deficit in this account typically exerts pressure on foreign exchange reserves and exchange rates.

Data from Bangladesh Bank shows that the financial account recorded a deficit of $1.142 billion during the July–August period of fiscal year 2027.

In the corresponding period of the previous fiscal year, the deficit was $233 million.

This means the financial account deficit expanded nearly fivefold within a single year.

Despite the widening trade gap, strong remittance inflows kept the current account in surplus. In the first two months of the ongoing fiscal year, the current account surplus stood at $599 million.

During the same period of the previous fiscal year, the current account recorded a surplus of $197 million, marking a year-on-year increase of $402 million.

The current account is a vital component of the Balance of Payments, encompassing merchandise and service trade, investment income, and remittances.

A surplus indicates that regular foreign income exceeds outgoing expenditures.

A sharp rise in remittances served as the primary driver behind the current account surplus. During the July–August period of FY26, remittance inflows reached a total of $4.9 billion.

In the same period this fiscal year, inflows surged by 18.9% to reach $5.826 billion.

This reflects a $926 million year-on-year increase in remittances over the two-month span.

This robust growth in remittances helped absorb the pressure of the widening trade deficit and kept the current account in a positive position.

Why it matters

The widening trade and financial account deficits exert mounting pressure on Bangladesh's foreign exchange reserves and broader economic stability.