Bangladesh’s trade deficit widened in the first seven months of the current fiscal year as imports increased while export earnings declined, adding pressure on the country’s external balance.

Bangladesh Bank data showed that the merchandise trade gap rose to $13.8 billion in the July–January period of FY26, compared with $11.74 billion in the same period of FY25.

During the period, import payments grew by 4.6 per cent while export earnings fell by 1.1 per cent.

Total merchandise exports stood at $26 billion, with the ready-made garment sector generating $23.2 billion of the amount.

Export performance remained weak amid subdued global demand and continued price pressure from buyers. Producers also faced higher domestic costs.

Although some industries recovered from the political changeovers, overall export growth remained sluggish.

A few sectors posted moderate gains. Leather goods, engineering products and home textiles recorded some growth, but the increases were not enough to offset slower expansion in garment exports.

In contrast, imports rose to $39.88 billion in the seven-month period.

Payments for intermediate goods increased 4.8 per cent to $26.16 billion.

Fertiliser imports surged by 71 per cent, while petroleum imports rose by 31.6 per cent, reflecting stronger demand for energy and agricultural inputs.

Imports of capital goods rose by 2.6 per cent to $5.92 billion, including a 5 per cent increase in capital machinery.

The figures indicate limited but continued investment in industrial capacity despite cautious business conditions.

The higher import bill also contributed to a larger services deficit.

The services account recorded a deficit of $3.44 billion as payments for various services increased faster than earnings.

Travel payments rose by 29.4 per cent, driven largely by spending on overseas education and medical treatment.

The primary income account also remained in deficit.

The gap reached $2.94 billion due to profit repatriation by foreign companies and interest payments on external borrowing.

Official interest payments alone amounted to $1.8 billion during the period.

Despite the widening trade and income deficits, the current account deficit narrowed significantly.

It stood at $381 million in July–January FY26, compared with $1.32 billion in the same period a year earlier.

The improvement mainly came from stronger remittance inflows. Workers’ remittances rose by 21.8 per cent to $19.43 billion during the period.

Remittances from Saudi Arabia increased by 51.2 per cent, from the United Kingdom by 72.7 per cent and from Malaysia by 43 per cent, although inflows from the United States fell by 46.3 per cent.

The rise in remittances was supported by increased use of formal banking channels and a relatively stable exchange rate.

The financial account posted a surplus of $2.01 billion, up from $331 million of a year earlier.

Net foreign direct investment reached $867 million, while higher loan disbursements and trade credit also contributed to the surplus, though repayments increased.

With stronger inflows in the financial account, the overall balance of payments recorded a surplus of $2.28 billion, reversing a deficit of $1.22 billion a year earlier.

Foreign exchange reserves improved during the period. Gross reserves stood at $33.18 billion, while reserves calculated under the IMF’s BPM6 method were $28.68 billion.