Govt bets on 15% export growth despite challenges

The government yesterday set a merchandise export target of $55.2 billion and a services export target of $8.2 billion for fiscal year 2026-27. Economists and business leaders said achieving the targets would be difficult amid an uncertain global environment and persistent domestic constraints.

The targets are 15 percent higher than the actual export earnings in the last fiscal year, Commerce Minister Khandakar Abdul Muktadir said at a press conference at the commerce ministry.

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Bangladesh exported $48 billion worth of goods in FY2025-26, down 0.58 percent from the previous year.

Garment exports, which account for more than 80 percent of the country’s export earnings, fell 1.64 percent year on year to $38.70 billion in FY26. Industry leaders said exports are unlikely to recover quickly as higher energy costs, weaker consumer demand in key markets and rising inventories continue to weigh on global orders.

Before FY2024-25, merchandise exports had declined for two consecutive years after reaching a record $52 billion in FY22.

Abdur Razzaque, chairman of the Research and Policy Integration for Development, said achieving 15 percent export growth was possible, but considerable uncertainty remained.

Even the latest 10 percent tariff imposed by the US could affect exports. However, since shipments were weak in the last fiscal year, they may rebound this year, he added.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said achieving even 10 percent export growth would be difficult given the ongoing gas shortage, which has disrupted industrial production over the past 10 days.

“The current situation does not suggest the target is achievable. Exporters will be satisfied if they can achieve 2 percent to 4 percent growth by the end of the year,” Hatem said.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, also said the target would be difficult to achieve because of both domestic and external pressures.

At the briefing, Muktadir did not provide a sector-wise breakdown of the export target but said he remained optimistic that exports would recover and the goal could be achieved.

The government is counting on business stimulus measures, budget support and greater policy stability following the return of an elected government to help revive exports.

He also said exports could receive a further boost from new trade agreements. The Economic Partnership Agreement (EPA) with South Korea is expected to be signed within the next few months, while the EPA signed with Japan in February is expected to take effect after Parliament ratifies it in its next session.

Bangladesh also plans to sign at least six free trade agreements by the end of the year as negotiations progress. It is also negotiating a free trade agreement with the European Union to retain duty-free access to its largest export market after graduating from the group of Least Developed Countries (LDCs).

The country’s graduation to developing-country status may be delayed by another three years after two UN bodies, including the United Nations Committee for Development Policy (UNCDP) and the United Nations Economic and Social Council (ECOSOC), backed Bangladesh’s request.

The extension could provide greater certainty for businesses and trading partners by allowing Bangladesh to retain its LDC status until 2029, the minister said.

Replying to a question, Muktadir said improving energy supplies to industry remained a top priority, although it could not be done overnight. The government is procuring two more Floating Storage and Regasification Units (FSRUs) to increase gas supplies to factories.

He said lower exports in the last fiscal year were driven by both domestic political uncertainty and adverse global conditions. With an elected government in place, policy stability and predictability would help boost exports of goods and services, he added.