Exports grow 8.55% in FY25 despite sharp June dip

Despite a sharp 7.55% year-on-year decline in exports in June – the final month of the fiscal year – Bangladesh's overall exports grew by 8.55% in FY25 compared to the previous year.

According to data released by the Export Promotion Bureau (EPB), the country exported goods worth $48.28 billion in FY25, up from $44.47 billion in FY24.

Exporters attributed the unusual June dip – the only month in the fiscal year to record a year-on-year decline – to a combination of factors including reduced orders from major global brands, buyer uncertainty over US tariff issues, gas supply shortages in the country, and an extended Eid holiday break.

Shams Mahmud, managing director of Shasha Denims Ltd and former director of the BGMEA, told The Business Standard, "Due to uncertainty over tariff issues, US buyers are holding back a portion of their orders. Sales have dropped for some major brands, leading them to reduce orders from Bangladesh."

He added that ongoing gas supply shortages in Bangladesh have shaken buyer confidence, a factor that likely impacted June's export performance.

Despite the nearly 9% export growth recorded in the recently concluded fiscal year, Shams Mahmud warned that actual retention – the amount exporters earn after covering production costs – has declined.

"Though per-unit prices may appear higher, increased costs for raw materials, energy, and wages have significantly eaten into margins," he explained.

"Last year, exporting goods worth Tk100 might yield Tk10 in net earnings. This year, we exported Tk110 worth, showing 10% growth, but the actual retention dropped to just Tk1."

"This is why we shouldn't be complacent about the export growth figure," he cautioned.

Some exporters noted that due to the extended Eid holiday in June, certain shipments may have been advanced to May, inflating that month's figures while reducing June's.

In FY25, key sectors such as readymade garments, frozen fish, plastic products, leather, and footwear recorded strong year-on-year growth. Moderate growth was also observed in agricultural products and home textiles.

However, exports of certain items – particularly jute and jute goods – declined compared to the previous fiscal year.

Exporters remain divided over the outlook for Bangladesh's export performance in the coming months.

Fazlee Shamim Ehsan, managing director of Narayanganj-based Fatulla Apparels Ltd, said Bangladesh has benefited from a partial shift in orders away from China, which has contributed to the recent growth in exports.

"Overall, the export flow is likely to remain stable in the coming months. However, while large factories may see an increase in orders, small and medium-sized ones could experience a decline," he told TBS.

On the other hand, Shams Mahmud expressed concern about a possible drop in orders. "Top global brands are witnessing a fall in sales," he noted. "As a result, they may scale back their orders."

Apparel accounts for around 84% of Bangladesh's total export earnings.

A garment exporter, speaking on condition of anonymity, said, "One of the top European brands sourcing from Bangladesh has reduced its orders by around 30% in recent months."

'Tariff tensions, energy issues cast uncertainty over export outlook'

Dr M A Razzaque, international trade analyst and chairman of the Research and Policy Integration for Development (Rapid), has warned that a mix of global and domestic challenges may cloud Bangladesh's export prospects in the coming months.

Speaking to TBS, he said, "We don't yet know how countries will negotiate [with Trump's tariff policy] or what the outcomes will be. But there's a strong possibility that the additional 10% tariffs will remain in place, which could hurt consumption in the US market."

He noted that while China may continue to lose some global orders, it's uncertain how much of that Bangladesh can realistically capture – or whether it can at all.

"There's also a question of whether Bangladesh has the capacity to absorb China's diverted investments," he said. "Even if we manage to attract some, any shift in geopolitical behaviour could create new complications."

Dr Razzaque added that internal issues, such as Bangladesh's energy security concerns and its lagging investment climate, are also hampering the country's ability to attract foreign investment.