Trade deficit widens 31% as fuel import bill doubles

Bangladesh’s trade deficit jumped 31 percent year-on-year to $7.48 billion in July-September of this fiscal year as the fuel import bill more than doubled, according to Bangladesh Bank (BB) data released yesterday.

The country, which is highly reliant on imports for oil and gas, imported $19.33 billion worth of goods in the first quarter of the 2026-27 fiscal year. Import payments increased 15 percent year-on-year.

By contrast, export earnings rose 7 percent to $11.86 billion during the period.

The main driver behind the widening trade deficit was fuel. Imports of petroleum products rose 105 percent to $4.2 billion from $2.0 billion, accounting for most of the increase in total imports. Food imports also climbed, with edible oil purchases up 54 percent and wheat imports up 66 percent.

However, imports of capital goods and capital machinery fell, pointing to weaker business investment amid the economic slowdown, persistent inflation and a lack of investor confidence stemming from uncertainty.

Imports of capital goods dipped 13.6 percent in the July-September period. Of these, imports of capital machinery slumped 22.5 percent year-on-year to roughly $770 million. The BB data showed that the current account deficit, which covers trade, services, income and transfers with the rest of the world, increased to $1.33 billion from $821 million a year earlier.

Remittances helped limit the gap. Inflows rose 13 percent to $8.59 billion, led by Saudi Arabia, the United Kingdom and the United States.

Despite that, the country’s overall external account deficit widened. During the first quarter of this fiscal year, the deficit stood at $1.16 billion, against a surplus of $853 million in the same period a year earlier, reflecting that total foreign currency inflows were insufficient to cover external payments, with Bangladesh Bank meeting the shortfall from its reserves.

Source: The Daily Star