Bangladesh Export Growth Slows Amid Global Demand Dip and Energy Constraints
Bangladesh’s export earnings growth moderated in the first half of the current fiscal year, reflecting a challenging global economic environment and persistent domestic energy shortages, according to data released by the Export Promotion Bureau (EPB) on Sunday.
The country’s total merchandise exports reached $25.6 billion from July to December 2024, marking a 6.8 percent increase compared to the same period last year. This growth, however, represents a significant deceleration from the double-digit expansion rates recorded in the previous fiscal year. The slowdown is attributed to subdued demand in key Western markets, particularly the European Union and the United States, which together account for over 60 percent of Bangladesh’s exports.
Readymade garments, which constitute more than 80 percent of the nation’s total export earnings, grew by 7.2 percent to $21.4 billion. Within this sector, knitwear exports rose 8.1 percent, while woven garment shipments increased by 6.3 percent. Industry insiders expressed cautious optimism, noting that the growth, though slower, still demonstrates resilience amid global headwinds.
“The numbers reflect the reality of a slowdown in major economies like the US and EU, where consumers are tightening spending due to inflation and interest rate hikes,” said Dr. Mohammad Ali, a trade analyst at the Centre for Policy Dialogue in Dhaka. “However, Bangladesh’s garment sector has managed to hold its ground, largely due to competitive pricing and improved factory compliance standards.”
Domestically, the manufacturing sector has been grappling with irregular gas and electricity supply, which has hampered production capacity. Factory owners in the garment hub of Gazipur reported that load-shedding and gas shortages forced them to run generators at higher costs, squeezing profit margins. The government has acknowledged the issue and announced plans to increase gas supply to industrial zones, but implementation has been slow.
Export diversification remains a key challenge. Non-garment sectors, including leather, jute, and frozen food, posted mixed results. Leather exports fell by 4.5 percent to $1.1 billion, while jute and jute goods declined by 3.2 percent. In contrast, the pharmaceuticals and software sectors showed promising growth, rising by 12 percent and 18 percent respectively, albeit from a small base.
On the international front, Bangladesh’s export performance is being closely watched as the country prepares to graduate from the United Nations’ Least Developed Country (LDC) category in 2026. This transition will lead to the loss of preferential trade benefits, including duty-free access to the EU market under the Everything But Arms (EBA) scheme. Exporters are urging the government to negotiate alternative trade agreements with key partners to mitigate the impact.
“We need to be proactive in securing bilateral and regional trade deals, especially with the EU, China, and Japan,” said Faruq Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). “Without these, our competitiveness could be severely affected.”
Meanwhile, Bangladesh’s export to emerging markets, such as India, China, and Brazil, has shown positive trends, growing by 9.5 percent to $3.2 billion. This diversification, though still limited, offers a potential buffer against slowdowns in traditional markets.
The EPB data also revealed that the country missed its export target for the first half of the fiscal year by about 2 percent. Officials attribute the shortfall to the Russia-Ukraine war’s lingering impact on global supply chains and rising raw material costs.
Looking ahead, analysts expect export growth to remain moderate in the coming months, with a potential uptick during the spring and summer seasons when demand for Bangladeshi garments typically rises. However, sustained improvement will depend on stable energy supplies, policy support for diversification, and a recovery in global consumer demand.