Trade Gap Widens Amid External Gains

Fresh concerns have emerged over the country’s external trade position as the gap between merchandise imports and exports widened markedly in the first half of the 2025–26 fiscal year. Nevertheless, stronger remittance inflows and an overall balance of payments surplus have offered a measure of macroeconomic relief, tempering immediate pressures on foreign exchange reserves.

According to the latest Balance of Payments report published by Bangladesh Bank, the merchandise trade deficit reached US$11.55 billion during July–December 2025–26, compared with US$9.76 billion in the same period of the previous fiscal year. This represents a year-on-year increase of approximately 18.34 per cent, signalling mounting strain on the external trade account.

Import and Export Performance

Total import payments during the first six months of the current fiscal year rose to US$33.68 billion, up from US$32.00 billion a year earlier—an increase of 5 per cent. In contrast, export earnings slipped marginally to US$22.12 billion, down 0.9 per cent from US$22.32 billion in the corresponding period of 2024–25.

A comparative overview is presented below:

The rise in import expenditure has been driven largely by higher global prices for fuel, industrial raw materials and essential food commodities. Exchange rate volatility and steady domestic consumption demand have also contributed to the increased import bill. Seasonal imports of edible oil, sugar, lentils and dates ahead of Ramadan further inflated short-term expenditure.

Current Account and Overall Balance

Despite the expanding trade deficit, other external indicators showed encouraging trends. The current account deficit narrowed to US$340 million, compared with US$520 million in the same period of the previous year, suggesting a modest easing of reliance on external borrowing.

Most notably, the overall balance of payments recorded a surplus of US$1.94 billion during July–December 2025–26, a substantial turnaround from a deficit of US$460 million a year earlier.

Remittance inflows totalled US$16.26 billion in the six-month period, marking an increase of nearly 18 per cent year-on-year. Foreign direct investment also rose to US$820 million, although approximately US$100 million in foreign portfolio investment was withdrawn from the stock market.

Economists caution that if the upward trajectory of the trade deficit persists, pressure on foreign exchange reserves and exchange rate stability could intensify over the longer term. They argue that diversifying export products, enhancing industrial productivity and strengthening competitiveness in international markets are now imperative to safeguard sustainable external sector stability.