JAGARAN CHAKMA

After a brief recovery in April, exports returned to a year-on-year decline last month, according to official data, as weak demand for apparel in key markets and lower order volumes from Western buyers weighed on earnings.

With merchandise exports dropping in May, overall shipments in the first 11 months of the current fiscal year also fell compared with the same period a year earlier.

Amid mounting external pressures largely caused by the war in the Gulf, exporters say a prolonged slowdown could put pressure on the country’s foreign exchange inflows and overall economic growth.

Meanwhile, with only one month remaining in the fiscal year, economists are questioning whether exports will end FY2025-26 in negative territory, reversing the recovery recorded in FY2024-25 after two consecutive years of decline.

In May, the country’s merchandise exports fell 7 percent year-on-year to $4.40 billion. As a result, exports in the July-May period of FY2025-26 declined 2.60 percent year-on-year to $43.80 billion, according to data released by the Export Promotion Bureau (EPB) yesterday.

The figure was down 2.6 percent from $44.95 billion in the corresponding period of the previous fiscal year, EPB data showed.

“Negative growth in May was expected,” said Mohammed Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

The readymade garment sector generates more than 80 percent of Bangladesh’s export earnings.

During the first 11 months of FY26, garment exports fell 3.4 percent year-on-year to $35.31 billion. Knitwear exports dropped 4.3 percent to $18.78 billion, while woven garment shipments declined 2.4 percent to $16.53 billion.

The BKMEA president said export orders have remained sluggish for much of FY26 as buyers in major markets continue to place orders cautiously amid global economic uncertainty.

“The global market is still weak, and export orders are lower than expected. That is why the sector is posting negative growth,” Hatem told The Daily Star.

He also pointed to the Eid-ul-Azha holidays, which began in late May and reduced factory working days, affecting production and shipments during the month.

According to Hatem, the strong growth recorded in April was partly due to a favourable comparison with the same month a year earlier, when overall production hours were reduced by Eid holidays.

“This year’s April had more working days, so some growth was natural. But the market situation has not improved significantly,” he said.

Hatem said the apparel sector has been under pressure throughout the fiscal year and there are few signs of a sharp recovery in the coming months. “We do not see any strong indication that orders will rebound significantly in the near future.”

He added that a prolonged weakness in exports could put pressure on the country’s foreign exchange inflows and overall economic growth.