Country’s Trade Deficit Rises by 23 Percent in One Year

The country’s import expenditure is growing much faster than its export earnings, resulting in an increased trade deficit that is putting additional pressure on the external sector. Economists warn that if this deficit is not brought under control, it could lead to long-term depreciation of the taka and a further decline in foreign exchange reserves.

According to the latest report from Bangladesh Bank, Bangladesh exported goods worth USD 1,108.7 crore in the first quarter (July–September) of the 2025–26 fiscal year. During the same period, goods worth USD 1,680 crore were imported. As a result, the trade deficit for the three months stood at USD 571.2 crore, up from USD 464 crore in the same period of the previous fiscal year—a nearly 23 percent increase.

Economists say the country’s economy remains import-dependent. Industrial production still relies heavily on imported raw materials, machinery, and fuel. Meanwhile, global economic slowdown and intense competition have prevented export earnings from growing as expected. Rising dollar prices have further increased import costs, deepening the deficit.

Experts emphasize the need for immediate and effective action to reduce the trade deficit. They suggest diversifying the export sector beyond garments by expanding exports in IT, pharmaceuticals, agricultural products, and light engineering. At the same time, controlling imports of luxury and non-essential goods is crucial. They also recommend making banking channels more attractive to increase remittance inflows, encouraging foreign investment, and boosting domestic production.

According to experts, balancing export growth and import control will help reduce the trade deficit and restore stability in the external sector.

The Bangladesh Bank report shows that while the current account balance was in surplus during the same quarter last fiscal year, it has now turned into a USD 4.8 crore deficit. However, the overall balance of payments has shifted from a deficit to a surplus—USD 85.3 crore in surplus compared to a USD 148 crore deficit during July–September of the previous year.

Data further shows that Bangladeshi expatriates sent USD 7.59 billion in remittances during July–September, a 15.9 percent increase from USD 6.54 billion during the same period last year.

Foreign direct investment (FDI) in the country also increased. In the first three months of the 2024–25 fiscal year, Bangladesh received USD 11.4 crore in FDI, which rose to USD 31.8 crore in the same period of the current fiscal year. However, foreign portfolio investment in the stock market remains negative. In the first quarter, more foreign funds left the market than entered it. Last fiscal year, net foreign investment in the stock market was USD 0.5 crore, while this year it stands at a negative USD 4.2 crore.

Regarding this, Bangladesh Bank’s Executive Director and Spokesperson Arif Hossain Khan told the media, “At present, imports of consumer goods have increased as Ramadan will begin in the latter half of February. Preparations are being made in advance to ensure adequate supply of Ramadan-related products, for which a large number of LCs have been opened. As a result, imports have exceeded exports, leading to a larger deficit in both the current account and trade balance.”

Khaborwala/TSN