Bangladesh Trade Deficit Widens to $2.09 Billion in July as Imports Surge

📊 Dhaka, Bangladesh — Bangladesh’s trade deficit widened to $2.09 billion in July 2026, the first month of fiscal year 2026-27, mainly due to higher imports of petroleum products and fertiliser, while exports declined year-on-year.

💰 The trade deficit rose from $1.5 billion in July 2025, according to balance of payments (BoP) data released by Bangladesh Bank on 8 September 2026. According to BoP data, imports grew by 8.6% in July, while exports declined by 1.6-1.9%. As imports exceed exports, the trade deficit widens.

⛽ Petroleum Imports Surge 83% to $1.37 Billion

🛢 Petroleum product imports amounted to $1.37 billion in July 2026, up from $750 million in July 2025 — representing an increase of more than 83.3%. Industry insiders said import bill payments have increased in recent times due to the rise in oil prices caused by the US-Israel war with Iran.

🌾 Meanwhile, fertiliser import costs rose by 50% to $187 million in July 2026, compared with $125 million a year earlier. The sharp rise in fertiliser import costs comes at a time when Bangladesh’s farmers are facing fertiliser shortages in Kurigram and Lalmonirhat districts ahead of the Aman cultivation season.

📊 Import bills for the month totalled $6.44 billion, while export earnings slipped to $4.35 billion — widening the gap significantly compared with the same month last year.

💰 Current Account Surplus Narrows Despite Remittance Growth

📊 Bangladesh’s current account surplus stood at $64-66 million in July 2026, down from $125 million in the same month of the previous fiscal year. The surplus declined despite higher remittance inflows, mainly because the trade deficit exceeded $2 billion. However, the key factor keeping the current account in surplus was the strong inflow of remittances.

💰 Bangladeshis working abroad sent home $2.86 billion in remittances in July 2026, compared with $2.48 billion in the same month a year earlier. This represents a 15.4% year-on-year increase in remittance inflows.

💬 Expert View: Single Month Data Not Conclusive

💬 Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said a single month’s balance of payments data was not enough to draw any significant conclusion.

💬 “However, the trade deficit has widened because imports increased while exports declined. The deficit was also lower in the same period of the previous fiscal year,” he said.

💬 Dr Zahid Hussain said the current account remained in positive territory because of the rise in remittances. “The current account could have gone into deficit because of the large trade deficit, but the increase in remittance inflows prevented that,” he said.

📋 Financial Account Records $677 Million Deficit

📊 The financial account recorded a deficit of $677 million in July 2026, compared with a deficit of $746 million in the same month of the previous fiscal year. The financial account had remained in surplus until June of the previous fiscal year.

💬 Dr Md Ezazul Islam, Director General of the Bangladesh Institute of Bank Management (BIBM), said the main reason for the financial account deficit was a $536 million net deficit under deposits, money and banking-related flows (DMBs and NBDCs).

💬 “This means payments to overseas banks increased, resulting in higher outflows of funds from the country,” he said. In July 2025, this component had recorded a surplus of $53 million.

🤝 FDI Inflows Decline Slightly

📊 In the financial account, net Foreign Direct Investment (FDI) fell to $116 million in July 2026 from $122 million in the same month last year. The financial account covers claims or liabilities to non-residents concerning financial assets, and its components include foreign direct investment, medium- and long-term loans, trade credit, net aid flows, portfolio investment and reserve assets.

📊 Bangladesh Bank data show that the negative financial account pushed the overall balance of payments into deficit. The country’s overall deficit increased to $633 million in July 2026 from $545 million in the same month of the last fiscal year, data showed.

🌏 Strategic Context for Bangladesh External Account

📊 For Bangladesh’s external account, the July 2026 BoP data reveals several structural challenges:

• ⛽ Petroleum import vulnerability — 83% surge reflects exposure to geopolitical oil price shocks
• 🌾 Fertiliser import pressure — 50% rise hits agriculture sector already in crisis
• 💰 Export stagnation — 1.6-1.9% decline signals continued RMG headwinds
• 🤝 Remittance dependency — current account surplus relies on remittance growth to offset trade deficit
• 📊 FDI slowdown — declining foreign investment is a concern for medium-term growth
• 📋 Banking outflows — $536 million deficit in DMBs/NBDCs signals capital flight risk

✅ For policymakers, the data underscores the urgent need to:

• 💰 Boost export diversification — reduce dependence on RMG and petroleum-intensive trade
• 🛢 Secure long-term energy contracts — lock in stable petroleum and LNG prices
• 💲 Strengthen remittance channels — maintain formal inflows through banking channels
• 🤝 Attract FDI — policy reforms to reverse declining foreign investment trend
• 📊 Address banking outflows — investigate and reverse capital flight through DMBs/NBDCs

🌏 For Bangladesh’s broader economic trajectory, the July BoP data offers a cautionary signal. While remittance growth has so far prevented a current account deficit, the underlying trade deficit is widening — driven primarily by import pressures that may persist as the Middle East conflict continues and global commodity prices remain elevated. Sustained export growth and continued remittance strength will be essential to maintain external account stability through FY2026-27.