Bangladesh Trade Deficit Rises $8bn in Five Years

Bangladesh’s trade deficit widened by nearly US$8 billion over the past five fiscal years, reaching US$24.16 billion in FY2024–25 from US$16.24 billion in FY2020–21, Commerce Minister Khandakar Abdul Muktadir told Parliament on Monday.

Responding to a starred question from ruling party lawmaker Jashim Uddin Ahmed of Chattogram-14, the minister attributed the growing trade gap partly to what he described as policy shortcomings of previous governments, alongside global economic challenges.

He said the global energy crisis, price shocks triggered by the Russia-Ukraine war, the US dollar shortage and volatile international market conditions significantly contributed to the widening deficit.

“In particular, higher import costs for fuel, food and industrial raw materials, combined with slower export growth, have pushed up the trade deficit,” the minister said.

According to official data presented in Parliament, Bangladesh’s trade deficit stood at US$16.24 billion in FY21 before surging to US$28.13 billion in FY22. It later eased to US$27.18 billion in FY23 and US$21.50 billion in FY24, before rising again to US$24.16 billion in FY25.

Export earnings reached US$45.36 billion in FY21, rose to US$60.97 billion in FY22, and then declined to US$53.92 billion in FY23 and US$51.11 billion in FY24 before recovering to US$55.19 billion in FY25.

Imports, meanwhile, increased from US$61.60 billion in FY21 to US$89.10 billion in FY22, before falling to US$78.29 billion in FY23 and US$72.61 billion in FY24. Import spending climbed again to US$79.35 billion in FY25.

To narrow the trade gap, the government has taken several initiatives aimed at boosting exports and reducing dependence on the ready-made garment (RMG) sector, which currently accounts for around 84 percent of total export earnings despite exports reaching 202 countries and territories in FY25.

The minister said export incentives similar to those enjoyed by the RMG sector are being extended to other high-potential industries, including leather and leather goods, jute products, agricultural products, pharmaceuticals, ICT and software services, light engineering, frozen foods and plastics.

He added that export-oriented firms in eight sectors have been granted bond facilities against bank guarantees to improve competitiveness in global markets.

The government has also introduced the “One District, One Product” programme, inspired by models in Japan and Thailand, to diversify exports and encourage region-based production. Under the initiative, 14 products have so far been identified across 64 districts.

Muktadir said Bangladesh is also moving ahead with efforts to sign free trade agreements with several countries, including Malaysia, Türkiye and New Zealand.

He added that the third round of negotiations for a Bangladesh-Singapore free trade agreement is scheduled to take place in Dhaka in August 2026.