Bangladesh’s trade deficit widened sharply in the first ten months of the current fiscal year as import growth significantly outpaced export earnings.
According to the latest Bangladesh Bank data, the trade deficit, which measures the difference between export and import payments, increased by 21.8 per cent to $22.21 billion during July-April of the financial year 2025-26 from $18.23 billion in the corresponding period of the previous fiscal year.
The widening deficit was driven mainly by rising imports.
Total imports increased by 5.9 per cent to $61.62 billion from $58.18 billion a year earlier.
In contrast, exports on a shipment basis declined by 1.1 per cent to $39.79 billion from $40.22 billion.
The country’s dominant export sector, readymade garments, recorded a 1.9 per cent decline to $32.01 billion.
Knitwear exports fell by 2.9 per cent to $16.95 billion, while woven garment exports dropped by 0.8 per cent to $15.06 billion.
However, some non-traditional sectors posted strong growth.
Engineering product exports rose by 26.2 per cent to $577 million, while leather and leather goods exports increased by 7.1 per cent to nearly $1 billion.
On the import side, petroleum products accounted for the largest increase.
Petroleum imports surged by 72 per cent to $7.64 billion. Imports of crude petroleum jumped by 90.2 per cent to $1.11 billion, while refined petroleum products rose by 69.2 per cent to $6.53 billion.
Wheat imports increased by 49 per cent to $1.96 billion and fertiliser imports climbed by 44.1 per cent to $3.44 billion.
Imports of capital machinery, often considered an indicator of industrial investment, rose by 12.5 per cent to $2.69 billion, suggesting that some investment activity continued despite broader economic challenges.
The sharp rise in remittance inflows provided a crucial cushion against the growing trade gap.
Remittances sent home by migrant workers increased by 19.5 per cent to $29.33 billion during the period from $24.54 billion a year earlier.
Strong remittance earnings helped narrow the current account deficit, which reflects trade, services, income and transfer transactions with the rest of the world.
The deficit declined to $1.07 billion from $1.64 billion in the same period of the previous fiscal year.
The financial account, which records foreign investment, loans and other capital flows, posted a surplus of $4.47 billion, up sharply from $1.13 billion a year earlier, largely due to higher trade credit inflows.
As a result, the overall balance of payments recorded a surplus of $3.74 billion, compared with a deficit of $655 million in the previous year.
This improvement enabled the central bank to strengthen reserve holdings.
Gross official foreign exchange reserves stood at $35.11 billion at the end of April, sufficient to cover 5.7 months of imports.
Despite the improvement in external balances, foreign direct investment remained subdued.
Net FDI declined to $1.14 billion from $1.43 billion a year earlier, indicating that long-term foreign investment in productive sectors has yet to recover meaningfully.
