Bangladesh's trade deficit narrowed by $290 million, or around 10 percent, in the first two months of the current fiscal year compared to the same period of the previous fiscal year.

During July-August of FY25, the trade deficit was $2.75 billion, down from $3.04 billion the same period of FY24, according to the latest data from the central bank.

The narrowing trade deficit is attributed to a rise in export earnings coupled with a decline in import expenditure.

Export earnings increased by 2.5 percent year on year to $7.16 billion in the two months of this fiscal year. 

Import cost fell 1.2 percent year on year to $9.91 billion from the same period a year ago, according to the Bangladesh Bank data.

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Financial account deficit keeps widening

Another significant development in the balance of payments is the country's current account, which has turned positive, supported by increased remittance inflows over the last two months.

From July to August, the current account surplus reached $111 million, compared to a deficit of $610 million during the same period of the last fiscal year, the data showed.

However, the financial account remained in the negative. The deficit however narrowed to $145 million in July-August period from $1.33 billion the same period a year ago.

The financial account, a component of the balance of payments, records claims on or liabilities to non-residents concerning financial assets. It includes components such as direct investment, portfolio investment, and reserve assets, broken down by sector.

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