Bangladesh Export Growth Slows Amid Global Economic Headwinds

Bangladesh's export earnings experienced a notable deceleration in the first quarter of the current fiscal year, reflecting the broader impact of global economic uncertainties and supply chain disruptions. According to data released by the Export Promotion Bureau (EPB), the country's merchandise exports grew by just 5.2 percent year-on-year in July-September, compared to a robust 12.8 percent growth recorded in the same period last year. The total export value stood at approximately $12.5 billion, falling short of the government's target of $13.2 billion for the quarter.

The slowdown was particularly pronounced in the ready-made garment (RMG) sector, which accounts for over 80 percent of Bangladesh's total exports. RMG exports rose by only 4.8 percent to $10.2 billion, a sharp decline from the 14.5 percent growth seen a year earlier. Industry insiders attribute this to reduced orders from key markets such as the United States and European Union, where inflation and rising interest rates have dampened consumer spending. Buyers are also adopting a cautious approach, placing smaller and more frequent orders to manage inventory risks.

Within the RMG sector, knitwear exports grew by 5.1 percent to $5.6 billion, while woven garments saw a 4.3 percent increase to $4.6 billion. Other export categories, including leather and leather products, jute and jute goods, and agricultural products, also showed mixed performance. Leather exports declined by 2.1 percent to $320 million, while jute exports increased by 3.8 percent to $280 million. Agricultural exports, led by vegetables and fruits, rose by 6.5 percent to $150 million.

Exporters have expressed concern over the rising cost of raw materials, particularly cotton and yarn, which have squeezed profit margins. The disruption in global shipping routes, exacerbated by the Red Sea crisis, has also led to longer transit times and higher freight costs. Additionally, the ongoing energy crisis in Bangladesh, with frequent power cuts and gas shortages, has hampered production capacity in industrial zones.

In response, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has called for government support, including lower interest rates on working capital loans, tax rebates, and improved energy supply. The government has already announced a stimulus package of 5,000 crore taka for the export sector, but industry leaders argue that more targeted measures are needed to maintain competitiveness.

On the international front, Bangladesh continues to benefit from its strong presence in the global apparel market, with a growing demand for sustainable and ethically produced garments. The country is also diversifying its export basket by promoting non-traditional sectors such as IT services, pharmaceuticals, and footwear. However, these sectors remain nascent and require substantial investment and policy support to scale up.

Looking ahead, the EPB has revised its export growth target for the full fiscal year to 10 percent, down from the initial 12 percent. Exporters remain cautiously optimistic, banking on the upcoming holiday season in Western markets to boost orders. Meanwhile, the government is working to strengthen trade ties with emerging markets in Asia, Africa, and the Middle East to reduce dependence on traditional buyers.

Analysts warn that Bangladesh must address structural bottlenecks, including infrastructure gaps, regulatory hurdles, and labor unrest, to sustain long-term export growth. The country's graduation from the UN's Least Developed Country (LDC) status in 2026 will also bring new challenges, as it will lose preferential trade access to many markets. To mitigate this, Bangladesh is negotiating free trade agreements with several countries, including China and India.

Despite the current headwinds, Bangladesh's export sector remains resilient, supported by a large workforce, competitive labor costs, and a growing reputation for quality and compliance. The coming months will be critical as the industry navigates a volatile global environment while striving to meet its ambitious targets.