Trade gap up $8b in 5 years

Bangladesh’s trade deficit has widened by nearly $8 billion over the past five fiscal years, increasing from $16.24 billion in FY2020-21 to $24.16 billion in FY2024-25, Commerce Minister Khandakar Abdul Muktadir informed parliament on Monday.

Responding to a starred question from ruling party lawmaker Jashim Uddin Ahmed of Chattogram-14, the minister said a combination of domestic and international factors had contributed to the growing trade imbalance.

He attributed part of the widening deficit to policy shortcomings of previous administrations, while also highlighting the impact of global economic challenges, including the energy crisis, the Russia-Ukraine war, foreign exchange market volatility and unfavourable international trade conditions.

According to the minister, rising import costs for energy, food commodities and industrial raw materials, coupled with comparatively slower export growth, have been major drivers of the expanding trade gap.

Data presented in the Jatiya Sangsad showed that the trade deficit jumped from $16.24 billion in FY2020-21 to $28.13 billion in FY2021-22. The deficit subsequently eased to $27.18 billion in FY2022-23 and $21.50 billion in FY2023-24 before widening again to $24.16 billion in FY2024-25.

Export earnings experienced significant fluctuations during the period. Exports increased from $45.36 billion in FY2020-21 to $60.97 billion in FY2021-22, before declining to $53.92 billion in FY2022-23 and $51.11 billion in FY2023-24. Export receipts recovered to $55.19 billion in FY2024-25.
Imports followed a similar trajectory.

Import payments rose sharply from $61.60 billion in FY2020-21 to $89.10 billion in FY2021-22, before falling to $78.29 billion in FY2022-23 and $72.61 billion in FY2023-24. Imports increased again to $79.35 billion in FY2024-25.

To address the persistent trade imbalance, the government has undertaken a range of initiatives aimed at diversifying exports and reducing reliance on the ready-made garment (RMG) sector, which currently accounts for around 84 per cent of Bangladesh’s export earnings despite the country exporting goods to 202 countries and territories.

The minister said the government was extending incentives and facilities similar to those available to the garment industry to other export-oriented sectors with strong growth potential.

Eight sectors — leather and leather goods, jute and jute products, agricultural products, pharmaceuticals, ICT and software services, light engineering products, frozen food and fish, and plastic products — have been granted bonded warehouse facilities against bank guarantees to enhance their competitiveness in international markets.

Muktadir also highlighted the government’s “One District One Product” initiative, modelled on similar programmes in Japan and Thailand, to promote region-based export development. Under the programme, 14 products have so far been identified across the country’s 64 districts.

In addition, Bangladesh is pursuing free trade agreements (FTAs) with several countries, including Malaysia, Turkey and New Zealand, to improve market access and boost exports.

The minister said the third round of negotiations on a Bangladesh-Singapore Free Trade Agreement is scheduled to be held in Dhaka in August 2026.

According to the commerce minister, these initiatives are expected to support export diversification, expand access to international markets and help gradually reduce the country’s trade deficit in the years ahead.