Trade Deficit Widening Turns the Balance of Payments Surplus into a Current Account Stress Test

Situation

Bangladesh's external position is being reshaped by import growth, not by export strength. The merchandise trade deficit widened to $27.28 billion in FY26, a 34 percent increase from $20.40 billion in FY25 [The Daily Star, 10 August 2026]. The current account deficit also widened sharply to $1.59 billion from $138 million in FY25 [The Financial Express, 10 August 2026]. The overall balance of payments surplus of $6.60 billion therefore masks a deterioration in the underlying trade and current account position [The Financial Express, 10 August 2026]. Policymakers now face a two-speed external account: strong financial inflows and record remittances on one side, weak export performance and accelerating import payments on the other.

Evidence

• The merchandise trade deficit widened to $27.28 billion, up 34 percent from $20.40 billion in FY25 [The Daily Star, 10 August 2026].
• FOB imports rose 10.5 percent to $71.14 billion from $64.36 billion, the largest annual import increase since FY22; CIF import payments rose 10.1 percent to $75.24 billion [The Business Standard, 10 August 2026].
• Goods exports were almost flat at $43.85 billion to $43.86 billion, about 1 percent below the $43.96 billion recorded in FY25 [The Daily Star, 10 August 2026].
• Wage earners' remittances hit a record $35.59 billion, a 17.3 percent year-on-year increase, but this was insufficient to offset the expanded goods trade deficit [The Business Standard, updated 13 August 2026].
• The current account deficit widened to $1.59 billion, compared with $138 million in FY25 [The Financial Express, 10 August 2026]. Former central bank governor Ahsan H. Mansur noted that the current account remained comparatively manageable through May, but rapid import bill expansions toward the end of the fiscal year drove the deterioration [The Financial Express, 10 August 2026].
• The financial account surplus reached $7.89 billion, driving an overall balance-of-payments surplus of $6.60 billion, up nearly 95 percent from FY25 [The Financial Express, 10 August 2026].

Prescription

1. The Ministry of Finance and Bangladesh Bank should create a joint monthly external sector review. The review should track FOB imports against the FY26 outturn of $71.14 billion and CIF import payments against $75.24 billion [The Business Standard, 10 August 2026], with an agreed escalation trigger if late-year import acceleration repeats the pattern identified by Ahsan H. Mansur [The Financial Express, 10 August 2026].
2. Bangladesh Bank should require scheduled banks to submit weekly CIF payment reports during the closing months of the fiscal year. This should be a permanent supervisory reporting line, not a new control regime, aimed at early detection of the rapid import bill expansion seen toward the end of FY26 [The Financial Express, 10 August 2026].
3. The Ministry of Commerce, with NBR and Bangladesh Bank, should conduct a product-level review of the import increase from $64.36 billion to $71.14 billion in FOB terms [The Business Standard, 10 August 2026]. The first step should classify non-priority import lines; administrative scrutiny should apply only to those lines, with essential production inputs kept open.
4. The Ministry of Finance and Bangladesh Bank should hold the financial account surplus of $7.89 billion and the balance-of-payments surplus of $6.60 billion as an external buffer rather than treating it as a green light for import financing [The Financial Express, 10 August 2026]. The mechanism should be a monthly published external buffer note that separates current account weakness from financial inflows.
5. NBR and the Ministry of Finance should keep tax and documentation rules for wage earners' remittances stable after the record $35.59 billion inflow in FY26 [The Business Standard, updated 13 August 2026]. Any new compliance friction on remittance transfers should require a prior external sector impact review.

Risks and tradeoffs

Administrative import scrutiny can easily become broad import compression. That would create input shortages in production that relies on imported inputs. The binding constraint is the near-flat export position of $43.85 billion to $43.86 billion [The Daily Star, 10 August 2026], which offers little offsetting export revenue when imports are curtailed.

The financial account surplus of $7.89 billion may reverse more quickly than goods trade adjusts [The Financial Express, 10 August 2026]. If that happens, the current account deficit of $1.59 billion will become the dominant external story and could force a harder adjustment [The Financial Express, 10 August 2026]. Because the deterioration was concentrated late in the fiscal year, retrospective controls may also arrive after the damage has already occurred [The Financial Express, 10 August 2026].

Remittances at $35.59 billion are a record, but they were already insufficient to offset the expanded goods trade deficit [The Business Standard, updated 13 August 2026]. Policy cannot assume that another record inflow will finance continuing import growth.

Bottom line

The $6.60 billion overall balance-of-payments surplus should not be read as an all-clear when the current account deficit has widened to $1.59 billion [The Financial Express, 10 August 2026]. The immediate task is to use the surplus to build external buffers and tighten import monitoring before the near-flat export position of $43.85 billion to $43.86 billion and the record remittance flow of $35.59 billion face another late-year import surge [The Daily Star, 10 August 2026; The Business Standard, updated 13 August 2026].