Bangladesh’s trade deficit widened slightly in July–August of FY2025–26 as imports rose sharply reflecting early signs of economic recovery and higher domestic demand amid political and business uncertainty.
According to Bangladesh Bank data, the trade deficit grew to $2.95 billion in the first two months of the fiscal year from $2.74 billion in the same period of FY2024–25.
Import payments surged by 9.8 per cent to $10.88 billion, compared with $9.91 billion a year earlier, while export earnings rose by 10.7 per cent to $7.92 billion.
BB officials said that the widening deficit stemmed mainly from increased imports of essential commodities and industrial raw materials as production activities resumed after the prolonged political unrest and uncertainty.
Economists, however, said that while a growing trade deficit may appear concerning, it also signals a rebound in production and investment demand.
The rise in imports of machinery, intermediate goods, and inputs suggests businesses are preparing for renewed industrial activity after a year of contraction.
Despite the trade deficit, the overall external balance showed some improvement due to a surge in remittance inflows and export earnings.
The current account surplus rose to $483 million in July–August 2025 from $191 million during the same period last year.
This improvement follows a $981 million surplus recorded in FY2024–25, reversing eight years of persistent current account deficits that began in FY2017.
Remittance inflows jumped 18.5 per cent to $4.9 billion in July–August from $4.13 billion in the corresponding period of 2024, driven by the easing of dollar shortages and improved confidence in the banking system.
The secondary income component, which largely reflects remittances, climbed to $4.9 billion from $4.22 billion a year earlier.
However, not all external indicators were positive.
The deficit in the services account widened to $889 million from $617 million a year ago, reflecting higher payments for freight, logistics, and business services.
The primary income deficit also rose to $661 million as payments to foreign investors and expatriate workers outpaced income from abroad.
The financial account, which tracks capital flows, posted a deficit of $528 million in July–August compared with $1.17 billion a year earlier, indicating continued weak foreign investment sentiment.
Overall, the balance of payments recorded a small deficit of $53 million in July–August 2025, a sharp improvement from the $1.43 billion deficit a year earlier.