Bangladesh Export Sector Sees Modest Growth Amid Global Economic Slowdown

2026-05-28

Bangladesh's export sector has recorded a modest increase in earnings for the first quarter of the current fiscal year, driven primarily by strong performance in the ready-made garment (RMG) sector, even as global economic headwinds persist. According to data released by the Export Promotion Bureau (EPB), total exports

The RMG sector, which accounts for over 80 percent of Bangladesh's total exports, contributed $9.8 billion during this period, a growth of 2.8 percent year-on-year. Industry insiders attribute this resilience to increased orders from European and American buyers, who continue to source from Bangladesh due to competitive pricing and improved compliance standards. However, they caution that the pace of growth has slowed from the double-digit figures seen in the previous fiscal year, reflecting reduced consumer demand in key markets amid inflation and economic uncertainty.

Export earnings from other sectors showed mixed results. The leather and leather goods sector saw a 5.1 percent decline, earning $291 million, while jute and jute goods exports fell by 8.3 percent to $248 million. In contrast, the pharmaceutical and agricultural product sectors posted gains, with exports rising by 12 percent and 7 percent respectively, indicating a gradual diversification of Bangladesh's export base.

On the international front, Bangladesh's export growth aligns with broader trends in South Asia, where countries like Vietnam and India have also experienced slower export expansion due to weakening global demand. The World Trade Organization (WTO) recently revised its global trade growth forecast for 2023 down to 0.8 percent, citing geopolitical tensions and high interest rates. For Bangladesh, the slowdown in major markets such as the United States and the European Union—which together absorb nearly 60 percent of its exports—poses a significant challenge.

Analysts point out that Bangladesh's export sector remains vulnerable to external shocks, including fluctuations in raw material prices and energy costs. The country imports most of its cotton and synthetic fibers, making it sensitive to global commodity price movements. Additionally, rising energy costs have increased production expenses for manufacturers, squeezing profit margins.

To mitigate these risks, the government and private sector have been pushing for greater market diversification. Bangladesh has strengthened trade ties with emerging economies in Asia, Africa, and the Middle East. Exports to China, for instance, grew by 8.5 percent in the first quarter, driven by demand for leather and textile products. Similarly, shipments to Japan and South Korea have increased, though from a smaller base.

Another positive development is the ongoing improvement in workplace safety and labor rights, which has helped Bangladesh retain its preferential trade status under the European Union's Everything But Arms (EBA) scheme. The EU remains the largest export destination for Bangladesh, accounting for about 45 percent of total RMG exports. Recent audits by international buyers have shown progress in factory conditions, which could lead to more orders in the coming months.

Looking ahead, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has expressed cautious optimism. They expect export growth to remain in the range of 3-5 percent for the full fiscal year, assuming no major disruptions in global supply chains. However, they warn that any escalation of the Russia-Ukraine conflict or a sharper-than-expected economic downturn in the West could dampen prospects.

In summary, Bangladesh's export sector is navigating a challenging global environment with relative stability, thanks to its dominant RMG industry and efforts to diversify markets. While the immediate outlook is tempered by external uncertainties, the country's long-term export trajectory remains supported by competitive manufacturing capabilities and ongoing reforms in compliance and sustainability.