Bangladesh’s external trade position is coming under mounting strain as a widening merchandise trade deficit offsets modest gains in other areas of the balance of payments. Despite steady inflows of remittances and improved overall balance figures, stagnant export earnings combined with rising import costs are intensifying pressure on the macroeconomy.
According to the latest balance of payments update released by Bangladesh Bank, the merchandise trade deficit during the first half (July–December) of the 2025–26 fiscal year stood at USD 11.554 billion. This marks a significant increase from USD 9.76 billion recorded during the same period of the previous fiscal year—an 18.34 per cent year-on-year rise.
Import–Export Performance at a Glance
In the first six months of 2025–26, total imports reached USD 33.68 billion, reflecting an increase of nearly 5 per cent compared with the corresponding period a year earlier. By contrast, export earnings declined marginally by 0.9 per cent to USD 22.12 billion.
The comparative picture is set out below:
| Indicator | July–Dec 2024–25 | July–Dec 2025–26 | Growth Rate |
|---|---|---|---|
| Import Expenditure | USD 32.00 bn | USD 33.68 bn | +5% |
| Export Earnings | USD 22.32 bn | USD 22.12 bn | -0.9% |
| Trade Deficit | USD 9.76 bn | USD 11.554 bn | +18.34% |
The surge in import payments has been driven by higher global prices for fuel, industrial raw materials and food commodities. Exchange rate volatility against the US dollar and rising domestic consumption have also contributed to the increase. Additionally, import volumes of essential commodities—including edible oil, sugar, pulses and dates—rose ahead of Ramadan, temporarily adding to import expenditure.
Current Account and Overall Balance
There are, however, signs of relative stability elsewhere. The current account deficit narrowed to USD 340 million at the end of December, compared with USD 520 million in the same period of the previous year. A narrower current account gap typically reduces reliance on external borrowing.
More notably, the overall balance recorded a surplus of USD 1.94 billion by December, a marked turnaround from a USD 460 million deficit a year earlier. This improvement reflects stronger financial account inflows and remittance growth.
Remittances and Foreign Investment
Remittance inflows provided a key source of relief. During the July–December period, expatriate Bangladeshis sent home USD 16.26 billion—an 18 per cent increase year on year—bolstering foreign currency reserves and easing liquidity pressures.
Foreign direct investment (FDI) also rose to USD 820 million, up from USD 550 million in the same period last year. However, foreign portfolio investment in the capital market remained negative, with approximately USD 100 million withdrawn during the six-month period.
Outlook and Policy Implications
While stronger remittance flows and improved overall balances offer some reassurance, the expanding merchandise trade deficit serves as a warning signal. If the trend persists, it could exert renewed pressure on foreign exchange reserves, exchange rate stability and broader financial conditions.
Economists suggest that targeted policy support, export diversification and enhanced competitiveness will be essential to mitigate the growing imbalance and safeguard macroeconomic stability in the months ahead.