Bangladesh’s Trade Deficit Widens to USD 24 Billion
Bangladesh’s external trade sector has faced a significant setback in the 2025-26 fiscal year, with the merchandise trade deficit expanding to nearly $24 billion during the first 11 months (July-May), according to the latest balance of payments (BOP) data from Bangladesh Bank.
The trade gap reached $23.98 billion between July and May, marking a nearly 24% increase compared to the $19.38 billion deficit recorded during the same period of the previous fiscal year.
The Widening Gap: Imports vs. Exports
The widening deficit is primarily attributed to a combination of rising import costs and a decline in export earnings, exacerbated by high global commodity prices and fuel costs.
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Imports: During the July-May period, Bangladesh’s import payments totaled $64.02 billion, a 6.3% increase from the $60.25 billion spent in the corresponding period of the previous year.
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Exports: Export earnings struggled, totaling $40.04 billion—a 2% decline compared to the $40.87 billion earned during the same period in FY2024-25.
Key Economic Indicators (July–May, FY2025-26)
| Indicator | Status | Details |
| Trade Deficit | Widened | $23.98 Billion (up ~24% YoY) |
| Remittance | Robust Growth | $32.77 Billion (up 19.1% YoY) |
| Current Account | Slight Deficit | $0.30 Billion (improved from $0.78 Billion) |
| FDI (Net) | Declined | $1.31 Billion (down from $1.55 Billion) |
Mixed Economic Signals
Despite the mounting trade deficit, there are notable bright spots in the country’s external accounts:
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Remittance Surge: Expatriate Bangladeshis have been a pillar of strength, sending home $32.77 billion in the first 11 months, a significant 19.1% increase compared to the $27.50 billion received in the previous year.
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Current Account Improvement: The current account deficit showed signs of narrowing, standing at $300 million at the end of May, an improvement from the $780 million deficit seen at the same time last year.
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Overall Balance: The country’s overall balance of payments remains in a healthy state, showing a surplus of $4.02 billion, a sharp turnaround from the $1.15 billion deficit reported during the same period last year.
Challenges in Foreign Investment
Conversely, the data highlights a cooling trend in foreign investment. Net Foreign Direct Investment (FDI) fell to $1.31 billion in the July-May period, down from $1.55 billion in the previous year. Furthermore, the capital market saw a net outflow of portfolio investment, with $175 million leaving the country’s share market during this period, compared to a $134 million outflow the previous year.
Economic analysts noted that while remittances are providing a crucial cushion, the sustained pressure from the trade deficit remains a concern for the economy. The reliance on borrowing to cover the current account gap persists, underscoring the need for policies that further incentivize exports and sustainable foreign investment to ensure long-term stability.
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