Bangladesh expects to see export growth despite global trade shifts

Bangladesh, a South Asian country with a population of 180 million people going through political instability, expects substantial export growth although the Global trade dynamics have undergone significant shifts in recent years.

A document of the Ministry of Finance expected growth based on the projection of the World Trade Organization (WTO).

Although global trade experienced contraction in 2023, it will increase in 2024 and onwards, according to the World Trade Organization (WTO).

WTO also mentioned that the world merchandise trade volume has the potential to increase by 2.6 per cent in 2024 and 3.3 per cent in 2025. It explained that as inflation will come down, people will tend to buy more goods which will boost exports.

However, the advanced economies are likely to experience relatively modest export growth compared to the Emerging Market and Developing Economies (EMDEs), including that of Bangladesh.

EMDs are the countries that are often considered to have faster economic growth than others.

Exports of the EMDEs, on the other hand, are expected to grow approximately by 4 per cent in the medium term, according to the document.

As per country-specific projections, Bangladesh's export growth (volume) experienced a slowdown from 8.79 per cent in 2023 while expected to be 3.93 per cent in 2024. But the document says that it will be picking up pace again and reach 8.83 per cent by 2027.

The Euro area, which faced a significant contraction in 2023, is expected to recover gradually, with export growth rates of around 3 per cent from 2025 onward.

China's export growth rate is expected to remain moderate, ranging from 1.8 per cent in 2025 to 2.85 per cent in 2026 while India's export growth is forecasted to rebound strongly from a contraction of -2.76 per cent in 2023 to around 4 per cent in 2025.

The UK's export growth outlook is subdued, with contractions in 2023 and 2024, followed by modest growth rates below 2 per cent until 2027.

In contrast, the USA is projected to maintain a relatively stable export growth rate of around 3 per cent throughout the forecast period from 2024 to 2027.

With the gradual recovery of exports, the official document said that imports are also expected to rebound in the medium term (2026-27).

Like export performance, the EMDEs are projected to outperform the advanced economies in terms of import growth, driven by factors like infrastructure investments and expanding consumer markets.

While the global import outlook points towards a gradual recovery, the document mentioned that country-specific dynamics reveal varied trajectories.

For example, the IMF projected that Bangladesh's import volume growth is expected to rebound sharply from a contraction in 2023 to see modest growth in 2024 (4.1 per cent) and robust growth in 2025 (about 18.0 per cent).

China is expected to experience a declining trend in import growth with 3.4 per cent in 2024 and 0.9 per cent in 2025, while export growth in India is expected to accelerate from 4.8 per cent in 2024 to 6.6 per cent in 2025 and onward.

Import growth in advanced economies like the UK and the USA is projected to remain low, with the UK even posting negative growth in 2025.