Export Sector in Steep Decline in Bangladesh

Behind the noise of political tension, election turmoil, mob violence and various other issues, Bangladesh’s export sector—often described as the lifeline of the economy—is quietly sinking. Export earnings have been declining continuously for the past five months. Entrepreneurs say export orders are down by 30 to 40 percent compared to the same period last year, and they see little chance of recovery before June.
Shrinking global demand, domestic instability, and a lack of effective policy support are widely seen as the main reasons behind this negative trend. Business leaders warn that if the situation persists, the export sector could face a far deeper crisis just as Bangladesh approaches its graduation from Least Developed Country (LDC) status.
The prolonged downturn in exports has become a major concern for the economy, as exports—along with remittances and domestic demand—are one of its key driving forces.
Despite this importance, export earnings have been falling for five straight months, a trend that could directly affect foreign exchange reserves, import capacity, and employment in the coming days, according to sector insiders.
According to data from the Export Promotion Bureau (EPB), export earnings in December declined by 14.25 percent year-on-year to USD 3.96 billion. The downward trend that began in August has yet to reverse. In the first six months of the current fiscal year (July–December), total exports stood at USD 23.9968 billion, down 2.19 percent—or nearly USD 540 million—compared to the same period last year.
While the numerical shortfall may not appear very large, the reality is more worrying. There has not been a single month of recovery during this six-month period. Exports fell by 7.43 percent in October, 5.54 percent in November, and the rate of decline increased further in December. Economists say such sustained contraction is a clear warning sign for future economic stability.
Export earnings are directly linked to the country’s foreign exchange reserves. Reserves determine import capacity, industrial production, and the supply of goods in the domestic market. Bangladesh relies heavily on imports for food grains, fuel, and industrial raw materials. Weak reserves create obstacles to imports, complicate the opening of letters of credit (LCs), and push up the dollar exchange rate. This disrupts industrial production and increases business costs—an experience businesses faced between late 2023 and mid-2024.
Remittances and exports are the two main pillars supporting foreign exchange reserves. A major shock to either one affects the entire economy. At present, pressure from foreign debt repayments is also increasing, making it even more challenging for the government to ensure adequate dollar inflows and reserve stability.
Falling export earnings push industrial enterprises into financial distress, with ripple effects on transport, ports, banking, insurance, and the service sector. The ready-made garment (RMG) industry alone employs around four million workers, with several crore more people dependent on it directly and indirectly. Prolonged stagnation in exports therefore poses serious risks to employment.
Orders Down 30–40 Percent
BKMEA President Mohammad Hatem said the chances of export earnings rebounding before June are very slim. Compared to previous years, export orders have dropped by 30 to 40 percent. Uncertainty in gas and electricity supply, weaknesses in the banking sector, and insufficient policy support have put exporters under severe pressure. While competitor countries are sustaining exports through cash incentives, tax breaks, and easy credit, Bangladesh is falling behind. Without immediate policy support, the situation could deteriorate further.
Former BKMEA President and Managing Director of Plummy Fashions Ltd, Fazlul Haque, said exports are declining due to both domestic and global factors, and this trend could continue for another four to five months. In addition to shrinking global demand, the US reciprocal tariff is having a negative impact on exports.
Domestically, he pointed to a deterioration in law and order, uncertainty surrounding banking sector reforms, and buyers delaying orders while waiting for a new government. As a result, his factory is currently receiving 15 to 20 percent fewer orders.
Former BGMEA Director Mohiuddin Rubel said that the ongoing economic slowdown in Europe, reduced demand in the US apparel market, and declining consumer purchasing power have pushed Bangladesh’s export growth into negative territory for five consecutive months. The contraction in global demand is directly affecting the garment sector.
He added that faster, more efficient, and lower-cost export processes, stronger logistics, and business-friendly policy support in countries like China, Vietnam, and Cambodia are drawing global buyers away from Bangladesh, increasing competitive pressure.
Bangladesh is set to graduate from LDC status this year. After graduation, duty-free access and other trade benefits will gradually be withdrawn. Although developed countries have promised a three-year transition period, analysts warn that without adequate preparation, the impact could be severe.
Political and policy uncertainty is hampering preparation in both the public and private sectors. Investment decisions are being delayed, new projects are stalled, and initiatives to expand production capacity have slowed.
Taken together, the prolonged downturn in exports on the eve of LDC graduation is a clear warning signal for Bangladesh’s economy. Unless uninterrupted gas and power supply is ensured, banking sector reforms are accelerated, business-friendly policy support is strengthened, and political stability is restored, the country may face even greater shocks ahead.