Trade Deficit Rises as Exports Stall, Pressure Mounts on Foreign Transactions

Staff Report: PNN

Due to sluggish export growth, Bangladesh’s trade deficit in goods has risen again in the early part of the 2025–26 fiscal year. Analysis of Bangladesh Bank’s latest foreign exchange data shows that the trade deficit for goods in the first five months (July–November) of the fiscal year reached about $9.4 billion, significantly higher than the same period last year.

The latest Balance of Payments (BOP) report states that imports increased during this period while export earnings remained nearly stagnant, widening the import-export gap.

According to the data, Bangladesh imported about $27.6 billion worth of goods in the first five months of the fiscal year, a 6% increase over the previous year. In contrast, export earnings amounted to only $18.18 billion, showing minimal growth compared to the previous year.

Economists cite high international prices for fuel and raw materials, rising domestic production costs, and weak global demand as reasons for slower export growth. Imports of industrial and consumer goods could not be curtailed, directly affecting the trade deficit.

This negative trend has impacted the overall current account balance. As of November, the current account deficit stood at about $700 million, higher than the same period last year. Typically, a current account surplus would reduce reliance on foreign loans, but the rising deficit increases government borrowing risk.

Some positive aspects are visible in overall foreign transactions. The country’s overseas remittance inflow reached about $13 billion in the first five months, up nearly 17% compared to last year, helping maintain foreign currency reserves.

Foreign Direct Investment (FDI) also slightly increased, totaling about $650 million during July–November, significantly higher than the previous year.

However, the stock market tells a contrasting story. Foreign investors are withdrawing funds, causing portfolio investment to trend negatively.

Experts suggest that unless export diversification, fuel and import cost control, and an investor-friendly environment are strengthened, the trade and current account deficits could continue to put pressure on the national economy in the coming months.