Bangladesh’s trade deficit reached a three-year high of $27.28 billion in FY26, driven by rising imports, global tensions, higher petroleum prices and weak export growth. Analysts say global trade disruptions and tariff barriers widened the gap, while record remittances helped prevent an immediate balance of payments crisis.
Bangladesh’s trade deficit widened sharply to a three-year high of $27.28 billion in FY26, marking a 34 per cent increase from the previous year as imports rose significantly while export earnings remained largely unchanged, according to a report by The Daily Star.
Data from Bangladesh Bank cited in the report showed that the country’s exports stood at $43.85 billion during FY26, remaining almost flat year-on-year. In contrast, imports increased by 10.5 per cent to $71.14 billion, representing the largest annual rise in import value since FY22.
Economists and policy experts attributed the widening trade gap largely to international developments rather than a strong revival in domestic demand. Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said global factors were the primary drivers behind the increase.
According to Moazzem, higher petroleum prices linked to the conflict in West Asia contributed substantially to the rise in Bangladesh’s import bill. At the same time, tariff barriers in major export markets and disruptions across global supply chains affected export orders, limiting the country’s ability to increase export earnings.
Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), also cautioned against interpreting the higher import figures as evidence of a strong recovery in investment or domestic economic activity.
Razzaque noted that imports of capital machinery and industrial raw materials have remained weak. This suggests that the overall increase in imports has not yet been matched by a broad-based revival in productive investment. A trade deficit can be considered beneficial when higher imports are primarily driven by machinery, technology and other production inputs that strengthen future economic and export capacity.
However, Razzaque maintained that the recovery in imports should not necessarily be viewed negatively. Bangladesh had experienced years of import compression amid persistent inflation, and increased availability of essential goods could help address supply-side constraints.
Higher imports of food, fuel, essential consumer products and production inputs, he said, could improve domestic supply, increase competition and contribute to easing price pressures.
Another analyst pointed to Bangladesh’s weak private-sector credit growth, which remained at a historic low. The trend indicates that domestic demand and private investment continue to face significant challenges despite the increase in overall imports.
The widening trade deficit has nevertheless not resulted in an immediate balance of payments crisis. A major factor providing support to Bangladesh’s external position has been the strong performance of remittances.
Remittance inflows reached a record $35.6 billion in FY26, providing a substantial cushion for the country’s external accounts. The strong inflow helped contain the current-account deficit at around $1.6 billion, despite the sharp deterioration in the merchandise trade balance.
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The latest figures highlight the challenges facing Bangladesh as global tensions, energy prices, trade barriers and supply-chain disruptions continue to influence international commerce. While higher imports may support domestic supply conditions, a sustained improvement in the trade balance will likely depend on stronger export growth, investment in productive capacity and greater resilience against global economic shocks.
