Bangladesh’s balance of payments (BOP) is experiencing financial difficulties, with the financial account turning negative due to foreign debt repayment pressure, a lack of new foreign loans and foreign direct investment, and inefficiency in the use of foreign aid. The current account balance deficit has narrowed due to a steep decline in imports, but as the financial account turned negative, the overall balance deficit widened. Increased foreign debt repayment pressure and a lack of new foreign loans are the primary reasons for the negative financial accounts. In addition, the inflow of net foreign direct investment fell by 17.98% to $1.34 billion during the July-March period of FY23 compared to the same period in the previous year. To balance the current account deficit, the government must make the financial accounts positive by working with bankers and investors. In addition, Bangladesh needs to improve its service sector, as it is weak in areas such as education, health, and travel.
Balance of payments deficit widening due to foreign debt and lack of investment
Economic Tag: Central Bank
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