Bangladesh's Garment Exports Rose 5 Percent in Two Months, But Factory Owners Say the Numbers Don't Add Up

A Growth Number That Nobody Inside the Industry Seems to Trust

Bangladesh's garment exports climbed 5.12 percent to 7.495 billion dollars in the first two months of the current fiscal year, according to provisional Export Promotion Bureau data, a figure that should read as good news for a sector that employs roughly four million workers and earns more foreign currency than any other part of the economy. Instead, the people who actually run the factories are telling a more complicated story. Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said openly that the July August growth rate falls below industry targets, and pointed to a gas crisis, elevated interest rates and difficult trade conditions as the real backdrop behind the headline number. Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, went further, questioning whether the reported export figures line up with what factories are actually producing given ongoing utility shortages.

That kind of public skepticism from the industry's own trade bodies is unusual, and it complicates what would otherwise be a straightforwardly positive export story. It also illustrates something important about reading Bangladesh's trade data lately: a positive headline percentage and a healthy industry are not the same thing, and the gap between the two has rarely been wider than it is right now.

What the Two Month Numbers Actually Show

Broken down by category, the EPB's July to August figures show knitwear exports at 4.193 billion dollars, up 6.17 percent, and woven apparel at 3.301 billion dollars, up 3.81 percent. Home textiles were the standout performer in percentage terms, rising 11.17 percent to 154.55 million dollars, while cotton and cotton products were the lone weak spot, falling just over 13 percent. Knitwear's stronger growth over woven suggests demand is skewing toward Bangladesh's more basic, higher volume product lines rather than higher margin specialty garments, a pattern that tends to show up when buyers are cutting costs rather than expanding orders.

Looking at August in isolation adds useful context. Total merchandise exports for the month came in at 4.43 billion dollars, a 13.14 percent jump from 3.92 billion dollars a year earlier, with RMG alone contributing 3.89 billion dollars, up 13.92 percent. Knitwear grew 14.88 percent and woven garments 12.70 percent for the single month, both comfortably ahead of the two month average, which suggests August itself was a genuinely strong month even if July had been softer. Non RMG categories also had a good August: jute and jute goods jumped 37.09 percent, pharmaceuticals rose 28.52 percent, leather and leather goods gained 24.85 percent, and printed materials were up 24.83 percent. By market, the United States, Bangladesh's largest single destination, grew 26.09 percent in August, Turkiye surged 141.03 percent from a small base, and South Korea rose 42.37 percent.

Category (July to August 2026)	Value	Growth year on year
Total RMG exports	$7.495 billion	+5.12%
Knitwear	$4.193 billion	+6.17%
Woven apparel	$3.301 billion	+3.81%
Home textiles	$154.55 million	+11.17%
Cotton and cotton products	$82.24 million	-13.02%

Why the Headline Growth Rate Is Misleading Almost Everyone

Khan's explanation for the disconnect between the percentage growth and the mood on factory floors comes down to one word: base. August 2025 was an unusually weak month for Bangladeshi exports, dragged down by US reciprocal tariff measures that alone contributed to a roughly 3 percent decline in shipments to America that year. Comparing this August's performance against that depressed base flatters the year on year growth rate without necessarily reflecting a genuine improvement in underlying demand or capacity. Khan made the point concretely: August 2026 earnings of 3.61 billion dollars for the sector, by his own figure, actually fell by around 278 million dollars compared to July 2026, meaning the month over month trend line, not just the year over year one, moved in the wrong direction even as the annual comparison looked strong.

This is not a new problem for anyone who has followed Bangladesh's export statistics through 2025 and 2026. Growth rates calculated against a bad prior year period will almost always look impressive without telling you much about whether things are actually improving. The more useful comparison, and the one BGMEA's own leadership is implicitly making, is against July 2026 and against the industry's internal targets, both of which paint a far less flattering picture than the 13.14 percent August headline or the 5.12 percent two month figure suggests on its own.

The Structural Problems Behind the Skepticism

Khan and Hatem's public doubts are rooted in real operating conditions that have squeezed the sector for well over a year. An energy crisis that has periodically cut gas and electricity supply to industrial zones remains the most frequently cited culprit, forcing some factories to scale back production even as export orders theoretically hold steady on paper. Bangladesh Bank's own data shows private sector credit growth staying below 5 percent for a fifth consecutive month through July, with businesses across the economy, not just garments, citing energy shortages and elevated borrowing costs rather than interest rates alone as the real barrier to expansion. When an industry cannot reliably power its machines, the exact dollar value of what it manages to ship out becomes a less meaningful gauge of health than whether factories are running full shifts in the first place.

Hatem's more pointed skepticism, questioning whether reported figures match actual production, reflects a level of distrust that goes beyond normal complaints about a slow growth rate. It suggests that BKMEA's own members are seeing enough of a gap between the export data coming out of Dhaka and the reality on their factory floors that industry leadership felt compelled to say so publicly, rather than let a positive sounding headline number stand unchallenged. Whether that gap reflects data lags, informal channel shifts, or something else entirely was not spelled out, but the fact that it was raised at all by an industry association, rather than by outside critics, adds real weight to the caution.

What This Means Heading Into the Rest of the Fiscal Year

Garment exports remain Bangladesh's single most important economic lifeline, and the sector's performance ripples through everything from foreign exchange reserves to the millions of household budgets that depend on factory wages. The two month EPB numbers and the fuller August breakdown both point to an industry that is technically growing but doing so unevenly, propped up in the official statistics partly by a weak comparison point rather than purely by stronger demand, while still fighting energy shortages and elevated financing costs that have nothing to do with export orders. Bangladesh's currency stability and reserve position, both cited by Moody's this month as reasons for a more optimistic sovereign outlook, depend heavily on exactly this kind of export performance holding up in substance and not just in percentage terms. Whether the industry's own leadership continues sounding notes of caution even as year on year comparisons turn favourable again once the weak 2025 base rolls out of the calculation will be one of the clearer signals of whether Bangladesh's garment sector is genuinely recovering, or merely benefiting from an easy comparison that is about to run out.