Financial account’s deficit narrows 

The deficit in Bangladesh's financial account narrowed slightly to $5.39 billion in the July-December half of the current financial year, marking an improvement from a month ago, central bank figures showed.  

The shortfall stood at $5.48 billion in July-November of 2023-24.

The financial account, a key component of a country's balance of payments (BoP), records transactions that involve financial assets and liabilities and that take place between residents and non-residents.

It covers claims or liabilities related to foreign direct investments, medium and long-term loans, trade credits, net aid flows, portfolio investments, and reserve assets.

The financial account situation was a stark reversal from the identical period of the last financial year when the financial account was in surplus at $144 million. But the apparently sound health could not be maintained at the end of 2022-23 as foreign currency outflows outpaced inflows.

Consequently, in FY23, the financial account was $2.1 billion in deficit, in contrast to a $15.5 billion surplus a year earlier.

The lowering of the deficit in July-December of FY24 was driven by an improvement in the gross inflows of foreign direct investment and investment by non-resident Bangladeshis. 

For example, FDI stood at $1.83 billion in the first half of the fiscal year, up from $1.52 billion a month ago but down from $2.52 billion during the same period in FY23.

NRB investment improved to $55 million from $48 million. It was $56 million in July-December of FY23, BB data showed.