Trade deficit widened sharply despite modest exports and record remittance inflows, highlighting the economy’s continued dependence on imports during July-October.
Bangladesh Bank data showed that the trade gap expanded to $7.57 billion during the four-month period of the financial year 2025-26, up from $6.68 billion a year earlier, as import payments rose much faster than export earnings.
Exports increased slightly to $14.54 billion in July-October, marking growth of about 1.8 per cent from that of the same period last year.
Readymade garments remained the dominant driver, contributing more than $12.9 billion.
However, this growth failed to offset the rise in imports, which climbed by 5.5 per cent year-on-year to $22.11 billion, reflecting sustained demand for fuel, industrial inputs and consumer goods amid easing trade restrictions and higher global prices.
The wider trade deficit spilled over into current account, which remained in the deficit at $749 million.
The current account captures flows from trade, services, income and transfers and the deficit indicates that the country spent more foreign currency than it earned.
Strong remittance inflows helped contain the gap, but higher import bills and growing service payments kept the balance negative.
Remittances provided the single strongest buffer.
Inflows from overseas workers surged by 13.5 per cent to $10.15 billion during the July-October period, supported by tighter controls on informal hundi channels, a relatively competitive exchange rate and seasonal inflows.
Economists said that the current account deficit would have been far larger without this support.
Services account continued to weigh heavily on the external balance.
Net services payments widened to around $1.96 billion as spending on travel, transportation, education, healthcare and business services abroad increased.
These trends reflected both household-level pressures from a weaker taka and structural gaps in domestic services.
Pressure also intensified on income account.
Rising interest payments on external debt deepened the primary income deficit to $1.27 billion from that of $1.1 billion a year earlier.
Of this, $698 million went toward official interest payments on foreign loans, raising concerns about Bangladesh’s growing debt servicing burden and vulnerability to global interest rate shocks.
Despite the weaker current account, the overall balance of payments turned positive due to a sharp rebound in the financial account.
The financial account posted a surplus of $2.17 billion, reversing a $499 million deficit a year earlier.
Medium- and long-term foreign loan inflows jumped by more than 53 per cent to $1.55 billion, while foreign direct investment edged up to $445 million.
Portfolio investment, however, remained negative, signalling continued caution among foreign investors.
The surplus allowed the central bank to build reserves. Gross official reserves rose to $32.34 billion, while IMF BPM6 reserves increased to $27.58 billion, equivalent to nearly five months of import cover.
Economists warned that this improvement relied heavily on borrowing and remittances rather than a durable export-led adjustment.
Without faster export diversification, stronger investment inflows and tighter fiscal and monetary management, they said, the balance of payments could face renewed stress in the coming quarters amid global volatility.
