As Bangladesh enters the 2025-26 fiscal year grappling with numerous economic challenges, there is a bright spot offering hope and resilience: an all-time high in expatriate income and a solid rebound in export earnings. Together, these two pillars have not only stabilized the country’s foreign exchange market but also offered relief to the balance of payments and helped rein in import-related inflation.
According to figures released by the Bangladesh Bank and the Export Promotion Bureau (EPB), the outgoing 2024-25 fiscal year saw record-breaking remittance inflows and robust growth in exports, despite a global economic slowdown and domestic constraints such as energy shortages and political uncertainty.
Historic Surge in Remittances: Expatriates sent a total of $30.33 billion to Bangladesh in the 2024-25 fiscal year - an all-time high in the country’s history. This represents a staggering 26.8% increase or an additional $6.42 billion compared to the $23.91 billion received in the previous year.
This record-setting achievement was capped off in June, when expatriate workers remitted $2.82 billion, including $1.13 billion sent on the very last day of the fiscal year. This surge surpassed June 2024’s figure of $2.54 billion, signaling strong end-of-year flows.
Key Drivers Behind the Remittance Boom: Banking officials and economic analysts attribute this boom to a confluence of factors:Crackdown on Illegal Channels: The government’s crackdown on hundi and informal remittance channels led to a significant shift toward formal banking methods.Incentives for Legal Transfers: The government’s 2.5% incentive for remittances sent through legal means, along with faster processing times and reduced transaction fees, encouraged more expatriates to remit money legally.Stronger Monitoring: Bangladesh Bank and other authorities introduced stricter KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures, deterring illegal flows.
“We are seeing the impact of coordinated efforts,” said Habibur Rahman, Chief Economist at Bangladesh Bank. “Legal remittance channels have been strengthened, and our financial partners abroad are more confident in our systems. These remittances are a lifeline for both macroeconomic stability and household consumption.”
Export Growth Defies Headwinds: Exports also showed strong performance, registering a 10.2% year-on-year increase in the first 11 months (July-May) of FY 2024-25. The total export earnings for this period reached $44.95 billion, up from $40.8 billion in the same period of the previous year. In seven out of the 11 months, monthly exports exceeded $4 billion, showcasing sustained performance.In May 2025, alone, exports totaled $4.74 billion, reflecting an 11.45% increase compared to May 2024, despite global demand fluctuations, rising protectionism, and raw material shortages.
“It’s been a challenging year globally, but our exporters have shown resilience,” said Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). “We’ve diversified products, added value, and penetrated new markets, especially in Asia and the Middle East.”
Resilience Amid Challenges: The export sector overcame multiple hurdles during the year:U.S. trade tensions escalated with the re-election of President Donald Trump, including threats of counter-tariffs on apparel and leather goods.India’s export-import restrictions on certain raw materials created procurement issues for Bangladeshi manufacturers.The ongoing gas and electricity crisis forced many factories to operate below capacity or rely on expensive alternatives.Despite these challenges, the ready-made garments (RMG) sector remained the anchor of export performance, followed by home textiles, pharmaceuticals, and agricultural products.
Relief in the Dollar Market and Balance of Payments: The twin growth in remittances and exports has brought much-needed relief to the foreign exchange market, where the dollar crisis had previously caused major disruptions in import financing and inflationary pressure.
As of the last day of the 2024-25 fiscal year, foreign exchange reserves had risen to $31.68 billion, with a net reserve of $26.66 billion based on the IMF’s BPM6 reporting standard. This boost was aided further by loan disbursements from the IMF, World Bank, and ADB, signaling renewed global confidence in Bangladesh’s fiscal management.
The dollar exchange rate has also stabilized significantly. The interbank rate and import rates have dropped to around Tk 123 per USD, easing import-related inflation and stabilizing consumer prices.”A year ago, importers were struggling to open LCs due to a dollar shortage. Today, things are more stable. That’s a major turnaround,” said Abu Hena Md. Razee Hassan, a former deputy governor of Bangladesh Bank.
Balance of Payments Recovery: A notable improvement was observed in the country’s balance of payments (BoP) - one of the most crucial indicators of external sector health.According to Bangladesh Bank data:The current account deficit shrank from $6.02 billion in July-April FY 2023-24 to $4.63 billion in the same period of FY 2024-25.The overall balance of payments deficit also narrowed from $5.59 billion to just $0.65 billion.This recovery has restored confidence among foreign banks, easing the burden on importers and bolstering credit lines for trade-related transactions.
“The improving balance of payments has a domino effect. It reduces pressure on reserves, strengthens the currency, and supports credit ratings,” noted Dr. Ahsan H. Mansur, Executive Director of the Policy Research Institute (PRI). “It’s one of the most encouraging signs in the macroeconomic landscape right now.”
Broader Economic Impact: Beyond balance sheets, the impact of remittance and export growth is being felt across households and small businesses. Remittances support consumption, reduce rural poverty, and drive demand in real estate, education, and services. Meanwhile, export earnings create employment and generate tax revenues.
“These inflows are critical, not just to the economy but also to social stability,” said Professor Selim Raihan, Executive Director of SANEM. “They support millions of families, drive local economies, and provide a buffer against domestic shocks.”
Looking Ahead: Can the Momentum Be Sustained: While the outlook is cautiously optimistic, experts warn that sustaining this momentum will require structural reforms, continued vigilance, and a supportive policy environment.Key Priorities Include:Investing in energy infrastructure to ensure uninterrupted supply for industries.Enhancing diplomatic engagement to resolve potential trade disputes and secure favorable terms with key export destinations.Expanding training programs for overseas workers to boost remittance inflows through higher-skilled, better-paid employment.”We can’t take this success for granted,” said Dr. Nazneen Ahmed, Country Economist at UNDP Bangladesh. “The global economy is changing rapidly. We need agility, innovation, and governance to keep pace.”
In a year marked by political tension, inflation, and energy insecurity, the robust performance in remittance and export sectors stands out as a beacon of hope for Bangladesh. These earnings have not only supported macroeconomic stability but also helped restore confidence at home and abroad.As the new fiscal year unfolds, policymakers, business leaders, and development partners will be looking to consolidate these gains, diversify the economic base, and ensure that the benefits of growth reach all corners of the country.For now, though, Bangladesh has a reason to celebrate - an unprecedented wave of foreign income that is helping to steady the nation’s economic ship.
