Exports slump enters fourth month amid global slowdown, political uncertainty; outlook bleak until Feb

Since August, Bangladesh's export earnings have been declining for four consecutive months – a trend last seen during the Covid-19 pandemic – with exporters warning that the downturn may continue for a few more months.

They largely attribute this fall to reduced demand in the United States amid Trump ‍ administration tariffs and intensified competition in the European market as China and India seek to expand their market share.

Concerns among buyers about Bangladesh's ongoing political uncertainty is also seen as a major reason for the slump.

According to new data released today by the Export Promotion Bureau (EPB), November exports fell by 5.54% year-on-year, with total shipments dropping to $3.89 billion from $4.12 billion in the same month last year.

Despite the monthly slump, overall export earnings for July-November slightly exceeded $20 billion, up 0.62% from the same period of FY25 – largely due to an unusually strong performance in July.

The apparel sector, which contributes over 80% of Bangladesh's total export earnings, also saw a 5% year-on-year decline in November. Industry insiders opined that small and medium-sized factories have been hit hardest by a steep fall in orders.

Shrabony Knitwear Limited, located in Ashulia near Dhaka, previously exported apparel worth an average of $1.5 million per month, mostly to European markets.

But over the past four months, their monthly export earnings have fallen by nearly half to around $0.8 million, according to Md Belayet Hossain Ripon, Shrabony's managing director.

He told The Business Standard, "We are not seeing any signs of hope until March."

Explaining the situation, he said, "Buyers are hesitant to place large orders due to the current political uncertainty in the country. On top of that, competition in the European market has intensified."

Inamul Haq Khan Bablu, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told TBS, "Higher tariffs in the US have reduced consumption, leading to declining exports there. In Europe, we are facing heightened competition from India and China."

"Due to Bangladesh's ongoing political uncertainty, buyers are afraid to place their full orders here. This situation may continue until the election," he added.

Exporters estimate that about 3,000 garment factories are currently engaged in shipments, but only around 150 are operating without difficulties in securing orders. "The remaining factories are all facing problems to varying degrees," Bablu said.

The prolonged slump after Covid

EPB data analysis shows that the last time Bangladesh experienced a prolonged decline in exports was during Covid-19, when exports fell for six consecutive months. 

However, that decline was driven by global lockdowns and reduced consumer demand. 

According to industry sources, apart from that period, Bangladesh has not seen a four-month consecutive export decline in the last two decades.

The EPB is also analysing the reasons behind the current decline. 

Speaking to TBS today, Mohammad Hasan Arif, vice chairman of EPB, said, "Our exports to several key European markets – including Germany, France, and the Netherlands – have decreased. We have called a meeting to analyse the causes."

However, he suggested that some buyers may have placed advance orders in July because of tariff concerns, which could explain why export earnings for the full five-month period did not drop even as recent monthly figures weakened.

An EPB senior official, speaking on condition of anonymity, told TBS, "Political uncertainty has had some impact."

Citing an example, he said, "During the recent Global Sourcing Expo held in Dhaka, one European country expressed reluctance to attend due to the prevailing situation in Bangladesh."

However, experts argue that global factors – not domestic politics – are the primary drivers behind the slowdown in Bangladesh's exports.

Dr Mohammad Abdur Razzaque, international trade expert and chairman of Research and Policy Integration for Development (RAPID), told TBS, "The decline in Bangladesh's exports is mainly due to lower global demand driven by new Trump-era tariffs and the global economic slowdown, not domestic political issues."

"Although competition in the European market has increased as many countries are trying to expand their sales, it is not the case that their exports have grown significantly at Bangladesh's expense," he added.

Export data also shows that most major products outside apparel experienced declines in November, with only a few exceptions.

Sectors that saw year-on-year declines in November include, frozen and live fish 20%; agricultural products 24.68%; plastic products 15.49%; jute and jute goods 10.30%; specialised textiles 11.44%; home textiles 7.7%; and non-leather footwear 7.81%.

Leather and leather products were the only major category to record growth in November compared to the same month last year.