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Bangladesh’s trade deficit widened sharply to $19.2 billion in the first nine months of FY26, as falling export earnings and rising import costs put pressure on the country’s external trade balance.

According to data from Bangladesh Bank, export earnings declined 4.4% year-on-year to $32.3 billion during the July-March period, while import payments rose 4.6% to $51.6 billion.

The increase in imports was largely driven by higher spending on fuel and fertiliser. Petroleum imports jumped 54.1%, while fertiliser imports rose 40%, reflecting elevated global prices amid tensions in the Middle East involving Iran, the United States and Israel.

Despite the widening trade gap, Bangladesh’s current account deficit narrowed significantly, helped by strong growth in remittance inflows.

The current account deficit stood at $397 million during July-March, down from $878 million in the same period a year earlier. Remittance inflows surged 20.3% to $26.2 billion, providing crucial support to the country’s external balance.

The financial account also posted a surplus of $3.8 billion, largely due to higher trade credit inflows. Trade credit alone recorded a surplus of $3.2 billion, compared with a deficit of $1.6 billion a year earlier.

Economists said the stronger remittance flow played a key role in easing pressure on the balance of payments, even as import costs increased.

An economist said higher import payments were partly financed through trade credit arrangements, which helped improve financial inflows. He also noted that repatriation of export proceeds supported the external sector during the period.

As a result, the overall balance of payments recorded a surplus of $3.7 billion in July-March, a sharp turnaround from a deficit of $1.1 billion in the corresponding period last fiscal year.

Analysts say the country’s external sector remains relatively stable for now, although continued pressure from global commodity prices and weaker export performance could pose challenges in the coming months.