Garment exports rebound in Q4 despite rising production costs

Bangladesh’s readymade garment (RMG) sector staged a notable recovery in the final quarter of FY2025-26 despite energy shortages, rising production costs and global uncertainties.According to Bangladesh Bank’s latest quarterly review, net RMG export earnings rose 10.38 percent quarter-on-quarter to $6.23 billion during April-June, from $5.64 billion in January-March. The figure was also 20 percent higher than the same period a year earlier.Total RMG export earnings increased 9.79 percent from the previous quarter to $10.10 billion, while knitwear exports jumped 19.21 percent to $5.50 billion. Woven garment exports, however, edged up only 0.31 percent to $4.60 billion.Exporters said June’s overall export growth was partly driven by a low base in the previous year, when the Eid-ul-Azha holidays reduced shipments.Despite the quarterly recovery, the industry remains concerned about gas and power shortages. BGMEA President Mahmud Hasan Khan Babu said high interest rates, supply-chain weaknesses and growing competition from India and Vietnam would pose additional challenges.BTMA President Shawkat Aziz Russell said more than 900 of the association’s over 1,800 member factories were currently closed due to disruptions in gas supply.In Q4, the RMG sector imported raw materials worth $3.87 billion, equivalent to 38.32 percent of total garment export earnings. This resulted in a value addition of 61.68 percent.For the full fiscal year, RMG exports earned $38.97 billion, up only 0.96 percent year-on-year. The sector accounted for 7.82 percent of Bangladesh’s nominal GDP.The United States, Germany, the UK, Spain, France, the Netherlands, Italy, Canada and Belgium remained the major markets, accounting for 71.69 percent of RMG exports in the fourth quarter.Bangladesh Bank said the near-term outlook for garment exports remains moderately positive, supported by a potential recovery in demand and improvements in compliance.